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Talking Points President GCC [Global Climate Change] Plan 10/97
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Talking Points President GCC [Global Climate Change] Plan 10/97
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Talking Points on President's Climate Change Proposal
October 22, 1997
The President has proposed an ambitious climate change plan that is environmentally strong and economically
sensible. Based on the President's conviction that global climate change is the premier environmental challenge
of the 21st century, the President's plan will proceed pragmatically -- in three stages and with periodic economic
and scientific reviews -- to cut greenhouse gas emissions by almost 30% from levels projected for 2010.
In the first stage, the President's plan will provide funding, create incentives, build partnerships and give credit
for early emissions reductions. The second phase, beginning around 2004, will review, evaluate and extend the
efforts of the first phase while laying the groundwork for phase three. In phase three, an international and
domestic emissions trading system would begin.
The President's plan includes the following key elements:
A binding, realistic target to reach 1990 emissions levels by 2008-2012. This target is part of a
comprehensive framework for agreement in Kyoto that also includes flexible, market-based mechanisms
and the participation of developing countries. The President is also committed to reductions below 1990
levels in the five-year period that follows.
A $5 billion program of tax cuts and R&D for new technologies. To spur energy efficiency and the
development of new technologies, the President proposes a major new package of tax cuts and R&D
spending amounting to $5 billion over five years.
Active consultations over the next 9 months on an industry-by-industry basis, with early credit
for companies making early reductions. The President is committed to working with business to get
their best ideas on how they can best reduce their own emissions, and to rewarding firms that act early.
Developing countries must participate. Climate change is a global problem, and requires a global
solution. That's why the President has committed that the United States will not adopt binding
obligations without developing country participation.
A domestic and international emissions trading system. Such a system can harness the power of the
market to reduce emissions, as it has with great success in the case of acid rain.
Encouraging the use of energy-efficient products. The President will engage in a broad-based effort
to expand the use of existing energy-efficient technologies.
Federal procurement and energy use. The Department of Energy will spearhead a comprehensive
effort to reduce greenhouse gas emissions from Federal sources.
Electricity Restructuring. To deliver a significant down payment on emission reductions, while
saving consumers billions, we will pursue a bold plan for electricity restructuring.
Setting a concentration goal. With advice from the National Academy of Sciences, the U.S. supports
developing a specific, long-term concentration goal for greenhouse gases in the atmosphere.
Transition assistance. The President is committed to working with Congress and labor to ensure a just
transition for any workers dislocated by the changes in energy usage inherent in any climate change
plan.
PRESIDENT CLINTON'S CLIMATE CHANGE PROPOSAL
October 22, 1997
Global climate change is the premier environmental challenge and opportunity of the 21st
century, and the risks it poses justify sensible preventive steps. Addressing this issue is one of the
United States' greatest imperatives, for this and future generations. Recognizing the solid foundation
of climate science, President Clinton is committed to strong and sensible action to reduce greenhouse
gas emissions -- including realistic and binding emissions targets.
Key elements of President Clinton's climate change proposal include:
Binding Targets to Reach 1990 Emissions Levels by 2008-2012 and Reductions
Below 1990 Levels in the 5-Year Period That Follows. A critical component of the
President's comprehensive framework is a realistic, achievable, and binding target of
reducing greenhouse emissions to 1990 levels by 2008-2012 and reductions below
1990 levels in the 5-year period that follows.
$5 Billion Program of Tax Cuts and R&D for New Technologies. To spur energy
efficiency and the development of new technologies, the President proposes a major
new package of tax cuts and R&D spending amounting to $5 billion over five years.
Industry-by-Industry Consultations and Early Credit. The Administration
challenges key industries to prepare plans over the next 9 months on how they can best
reduce emissions. To provide an incentive for near-term actions to cut emissions, the
President is committed to ensuring appropriate rewards for firms that act early.
Developing Countries Must Participate. Climate change is a global problem, and
requires a global solution. That's why the United States has spear-headed joint
implementation projects, and the President has committed that the United States will
not adopt binding obligations without developing country participation.
Broad-Based Domestic and International Emissions Trading System Begins After
A Decade of Experience Has Accumulated. The President is committed to a market-
based emissions trading system, both domestically and internationally, that will
harness the power of the market to reduce emissions to 1990 levels by 2008-2012. The
trading system would begin after a decade's worth of experience with tax incentives,
R&D, early credit, electricity restructuring, Federal efforts, and other measures.
BINDING TARGETS: The U.S. binding target is realistic: It seeks to return U.S. emissions to 1990
levels in the period 2008-2012 and reduce them further thereafter. We reject the European proposal for
more stringent early reductions, as well as the "do-nothing" approach of some interests. The target is
achievable: By providing incentives for early action to reduce emissions, attacking domestic energy
inefficiencies, and putting in place a market-based emissions trading system, we can reach 1990 levels
in the proposed time frame with minimal economic costs. And it is meaningful: Achieving 1990 levels
in the period 2008-2012 would amount to almost a 30 percent reduction off a business-as-usual path,
an important first step on the road toward stabilizing greenhouse gas concentrations in the atmosphere.
SOLID PRINCIPLES: The President's five climate change principles include: that the policies
should be guided by science, rely on market-based, common-sense tools, that we should seek win-win
solutions, that global participation is essential to addressing the global problem of climate change, and
that we must have regular common-sense reviews of the economics and science of climate change.
SOUND AND SENSIBLE THREE-STAGE APPROACH: Reflecting his five key principles, the
President's plan includes three stages: Stage 1 includes priming the pump through programs such as
R&D, tax incentives, incentives for early action, and Federal leadership, and industry consultations.
Stage 2 builds upon the first stage by including a review and evaluation in preparation for the permit
trading system. Stage 3 -- which does not occur for a decade -- involves meeting binding targets
through a domestic and international emissions trading program. The President is committed to
working with labor and Congress to insure that we give proper assistance to any workers dislocated by
the changes in energy usage inherent in any climate change plan.
INITIAL ACTION PLAN: The President's immediate action plan includes 9 elements:
1. $5 Billion in Tax Cuts and Federal R&D: To spur energy efficiency and encourage the development
and deployment of lower-carbon energy sources, the Administration supports a major new package of
tax cuts and R&D spending amounting to $5 billion over five years.
2. Credit for Early Action: To provide an immediate incentive for near-term actions, the President is
committed to ensuring that firms acting early are rewarded appropriately.
3. Industry-by-Industry Consultations: The Administration challenges key industry sectors to prepare
plans over the next 9 months on how they can best reduce emissions.
4. Encouraging the Use of Energy-Efficient Products: The President will complement his tax
incentives, commitment to early action credit, and industry consultations by engaging in a broad-based
effort to expand the use of existing energy-efficient technologies.
5. Federal Procurement and Energy Use: The Department of Energy will spearhead a comprehensive
effort to reduce greenhouse gas emissions from Federal sources.
6. Electricity Restructuring: To deliver a significant downpayment on emission reductions, while
saving consumers billions, we will pursue a bold plan for electricity restructuring.
7. Setting a Concentration Goal: The United States supports developing a specific, long-term
concentration goal with the assistance of the National Academy of Sciences and other bodies.
8. Bilateral Dialogues: In addition to pursuing agreement in Kyoto, the Administration will pursue
bilateral dialogues with key developing countries to promote clean energy.
9. Economics and Science Reviews: The President proposes regular scientific and economic reviews.
These reviews will ensure that policy-makers have the best possible information on climate change.
WIN-WIN: There are numerous win-win solutions to reducing carbon emissions. For example, a
breakthrough in fuel cell technology announced yesterday will clear the way toward developing cars
that are three times as efficient as today's models -- cutting pollution while also cutting driving costs.
INITIAL CLIMATE CHANGE ACTIONS
October 22, 1997
President Clinton has proposed nine immediate actions to begin addressing climate change:
1. Tax Cuts and Federal R&D: To spur energy efficiency and the development of lower-carbon
energy sources, the Administration supports a major new package of tax cuts and R&D spending
amounting to $5 billion over five years. Many of the ideas from the recent report of the President's
Committee on Science and Technology (PCAST) will be considered in constructing this package.
2. Credit for Early Action: To provide an immediate incentive for near-term actions to cut emissions,
the Administration is committed to ensuring that firms which act early are rewarded appropriately. We
will work with companies to build a program that appropriately rewards those who take prompt and
early actions before the beginning of the mandatory emissions budget period in Stage 3.
3. Industry-by-Industry Consultations: The Administration challenges key industry sectors to prepare
plans over the next 9 months on how they can best reduce emissions, including how the Federal
government can remove regulatory hurdles that discourage energy efficiency. The Administration will
work in partnership with industry to develop sensible efficiency standards in a variety of areas.
4. Encouraging the Use of Energy-Efficient Products: As the Department of Energy's 5-Labs study
illustrates, many existing technologies produce win-win solutions to reducing carbon emissions -- but
nonetheless are still not widely used. The President is committed to expanding their reach. He will
therefore complement his other programs by engaging in a broad-based effort to expand the use of
existing energy-efficient technologies -- while also spurring the development of new technologies.
5. Federal Procurement and Energy Use: To reduce greenhouse gas emissions from Federal sources,
DOE will spearhead a comprehensive effort that includes expanded performance contracting to make
Federal buildings more energy-efficient, improved Federal procurement of energy-efficient technology,
and partnerships to improve the energy efficiency of Federal aircraft, ships and vehicles. Federal
agencies will also be called upon to assess emissions in major initiatives.
6. Electricity Restructuring: To spur further efforts to clean our air and deliver a downpayment on
greenhouse gas emission reductions, while saving consumers billions, we will pursue a bold plan to
restructure the energy sector. It is time to change the rules that are often more than 70 years old --
stifling innovations that can save money and impede newer, cleaner technologies.
7. Setting a Concentration Goal for Greenhouse Gases in the Atmosphere: The goal of the existing
climate treaty is to stabilize concentrations of greenhouse gases, but the specific concentration has
never been defined. The U.S. supports developing a specific, long-term goal, with the assistance of
the National Academy of Science and other appropriate bodies.
8. Bilateral Dialogues: In addition to pursuing agreement in Kyoto, the Administration will-pursue
bilateral dialogues with key developing countries to promote clean energy.
9. Economics and Science Reviews: The President proposes regular scientific and economic
reviews, to ensure that policy-makers have the best possible information on climate change.
BACKGROUND INFORMATION
INDEX
Title
1.
President Clinton's Climate Change Proposal
2.
Initial Climate Change Actions
Background Information
3.
President Clinton's Five Climate Change Principles
4.
President's Three-Stage Plan on Climate Change
5.
Comprehensive Framework for Effective, Sensible Action
6.
Fact Sheet on International Emissions Trading
7.
Fact Sheet on Joint Implementation
8.
Fact Sheet on Electricity Restructuring
9.
Fact Sheet on Federal Energy Management
10.
Fact Sheet on U.S. Global Change Research Program
11.
Fact Sheet on PNGV
12.
Fact Sheet on Fuel Cells
13.
Fact Sheet on PATH
14.
Fact Sheet on Potential Industry Sector Savings
15.
Fact Sheet on Potential Building Sector Savings
16.
Fact Sheet on Potential Transportation Sector Savings
PRESIDENT CLINTON'S FIVE CLIMATE CHANGE PRINCIPLES
October 22, 1997
Global climate change is the premier environmental challenge and opportunity of the 21st
century, and the risks it poses justify sensible preventive steps. Addressing this issue is one of
the United States' greatest imperatives, for this and future generations. Recognizing the solid
foundation of climate science, President Clinton is committed to strong and sensible action to
reduce greenhouse gas emissions -- including realistic and binding emissions targets.
President Clinton's climate change plan is based on five key principles:
Guided by science. The vast majority of the world's scientists have concluded that if the
countries of world do not work together to cut greenhouse gas emissions, temperatures will rise
and disrupt the global climate. Indeed, most scientists say this process has already begun. But
there is much we still don't know about how the climate and human health will react to
increased greenhouse gas concentrations. That's why the President's plan includes regular
science reviews, to ensure that our policies are guided by the best science available.
Market-based, common-sense tools. We have learned that the costs of protecting the
environment is substantially lower if we harness the power of markets to do so. That's why the
President's plan emphasizes flexible and market-based mechanisms. His plan includes a
domestic and international permit trading system for greenhouse gas emissions, similar to the
highly successful permit trading system that has dramatically cut acid rain at a fraction of the
predicted cost.
Seek win-win solutions. There are a multitude of win-win solutions to reducing carbon
emissions, that can improve our energy efficiency and save consumers money. For example, a
breakthrough in fuel cell technology announced yesterday will clear the way toward developing
cars that are twice as efficient as today's models -- cutting pollution while also cutting driving
costs. The President believes that we must seek such win-win solutions to addressing climate
change.
Global participation. Climate change is a global problem, and requires a global solution. A
ton of carbon emitted in Argentina has just as much effect on the global climate as a ton of
carbon emitted in the United States -- and within the next few decades, emissions from
developing countries are expected to exceed those from developed countries. And many win-
win opportunities exist to reduce greenhouse gas emissions in developing countries. That's
why the United States has spear-headed joint implementation projects and the President has
committed that the United States will not adopt binding obligations without developing country
participation.
Common-sense economic reviews. Our knowledge of the challenges and opportunities we
face will grow over time. Therefore, the President is calling for regular 5-year economic
reviews and updates, to ensure that policy-makers, both in the Administration and in Congress,
have the best possible information on how the economy is responding to the effort to address
climate change, how other countries are performing relative to their own commitments, and
how the climate is changing in response to human activities.
THE PRESIDENT'S THREE-STAGE PLAN ON CLIMATE CHANGE
October 22, 1997
Reflecting his five key principles, the President's plan will proceed in three stages:
Stage 1: Priming the Pump Through R&D, Tax Incentives, Incentives for Early Action,
Federal Leadership, and Industry Consultations. The first stage of the President's package
includes a 9-point action plan -- including $5 billion in tax incentives and spending for R&D
and energy efficiency, incentives for early action, a set of Federal government energy
initiatives, and industry-by-industry consultations to explore their best ideas on how to reduce
emissions in a cost-effective manner (including market-oriented standards for energy
efficiency). The first economic review would occur near the end of Stage 1.
Stage 2: Review and Evaluation. The second stage, which would begin around 2004, will
build upon the programs adopted in Stage 1, by including a review of our progress and an
evaluation of next steps as we move toward a market-based permit trading system for carbon
emissions. During this second stage, the details of the permit system would be refined and
perhaps tested. Such a permit system is similar in concept to the one that dramatically cut acid
rain emissions -- although the scale would be significantly larger than the current acid rain
program. The second economic review would occur near the end of Stage 2.
Stage 3: Meeting Binding Targets Through Domestic and International Emissions
Trading Program. In the third stage, we would reduce emissions to 1990 levels by 2008-
2012, and below 1990 levels in the 5-year period after that, through a market-based domestic
and international emissions trading system. Before beginning this third stage, the second
economic update and review would allow Congress and the President to evaluate how the
economy had responded to a decade's worth of experience in the first two stages of the
President's plan. The President is committed to working with labor and Congress to insure that
we give proper assistance to any workers dislocated by the changes in energy usage inherent in
any climate change plan.
This three-stage program recognizes the long-term nature of the effort to address climate change in
three ways:
By adopting a graduated approach to emissions reductions, it allows us to exploit the
tremendous opportunities for win-win reductions first.
By adopting a system of regular scientific and economic updates and reviews, it allows
us to monitor our progress and re-assess our success in reducing emissions, the state of
scientific knowledge, and how the economy is responding to our efforts. Only after we
have accumulated ten years of experience with the first two stages of the program would
we enter the internationally binding period.
By insisting that the United States will not adopt binding obligations without
developing country participation and by emphasizing the importance of an international
trading system and joint implementation, we take advantage of low-cost reduction
possibilities wherever they occur -- either here or abroad.
COMPREHENSIVE FRAMEWORK FOR EFFECTIVE, SENSIBLE ACTION
October 22, 1997
GREENHOUSE GAS EMISSION REDUCTION TARGET
Under the current international climate change agreement (signed in Rio de Janeiro in 1992),
industrialized countries accepted a non-binding emissions reduction goal. Most nations, including the
United States, will fall short of meeting it. This fact, coupled with better scientific evidence on the
seriousness of the climate change threat, led the U.S. to propose last year that a new agreement set binding
limits on emissions. The proposed U.S. emissions target is designed to provide important environmental
gains while maintaining strong economic growth. It is:
Realistic. Seeks to return U.S. emissions to 1990 levels in the period 2008-2012 and reduce them
further thereafter. Rejects European proposal for more stringent early reductions, as well as the
"do-nothing" approach of some interests.
Achievable. By providing incentives for early action to reduce emissions, attacking domestic
energy inefficiencies, securing flexible international implementation mechanisms, and putting in
place a market-based domestic emissions trading system, the U.S. can reach 1990 levels in the
proposed time frame with minimal economic costs.
Meaningful. Achieving 1990 levels in the period 2008-2012 would amount to almost a 30 percent
reduction off a business-as-usual path, an important first step on the road toward stabilizing
concentrations of greenhouse gases in the atmosphere. Emissions accounting will include all
greenhouse gas sources and sinks (including reforestation).
FLEXIBLE, MARKET-BASED IMPLEMENTATION
Just as the effects of climate change will be felt globally, so too are the causes of climate change global
in nature. Greenhouse gas emissions do equal harm to the atmosphere whether they come from a coal
plant in China or a bus in Boston. For this reason, any regime to reduce greenhouse gases must be global.
It must also allow all nations the ability to seek out the most efficient way of reducing emissions so that
the greatest gains are achieved at the least cost. For these reasons, the United States strongly supports
the inclusion in a new climate change agreement of two innovative, flexible mechanisms for reducing
emissions:
International Emissions Trading --Using Markets to Lower Costs. The principle of emissions
trading is to use the efficiency of the market place to achieve environmental objectives at the
lowest possible cost. Under an international emissions trading regime, a country (or firm) would
be able to meet its emissions reduction target by reducing pollution itself, purchasing reductions
from another country (or firm) that was able to achieve excess gains, or some combination of both.
Joint Implementation --A Global Solution to Low-Cost Reductions. Joint Implementation (JI)
is an innovative, market-based approach for addressing global climate change that uses
international partnerships to achieve low-cost reductions in greenhouse gas emissions. Under JI,
a company in the United States invests in a project which reduces emissions in another country and
uses those reductions as a less expensive means of meeting its own target.
PARTICIPATION OF DEVELOPING COUNTRIES
In addition to its non-binding emissions reduction aim for developed countries, the Rio climate change
agreement required all countries to take policies and measures to reduce emissions. Many developing
countries have made real strides, through, for example, reducing energy subsidies. Nevertheless, given
that developing country emissions will eclipse those from the developed world within several decades,
these countries need to do more. Accordingly, the U.S. calls on developing countries to strengthen their
existing commitments and to agree that their obligations must increase over time to include binding
emissions limits. Our principles include:
Global Participation. All countries must participate. Every nation would be required to take
meaningful actions to limit emissions. The U.S. will not assume binding obligations until
developing countries agree to participate meaningfully in the challenge of addressing climate
change.
Equity. The obligations of poorer and less developed countries should take into account their state
of economic development and their relative contribution to the climate change problem.
Assistance. While insisting that developing countries take meaningful actions to address climate
change, the U.S. recognizes that many of these countries face significant development challenges
that hamper their ability to reduce emissions. President Clinton is reemphasizing his commitment
to working with these nations to help build more sustainable energy futures. This includes a $1
billion package of assistance from USAID and a renewed commitment to provide financial
assistance through the Global Environment Facility, as well as our pathbreaking joint
implementation proposals.
FACT SHEET ON INTERNATIONAL EMISSIONS TRADING
October 22, 1997
Description
The principle of emissions trading is to use the efficiency of the market place to achieve
environmental objectives at the lowest possible cost. Under an international emissions trading regime,
a country (or firm) would be able to meet its emissions reduction target by reducing pollution itself,
purchasing reductions from another country (or firm) that was able to achieve excess gains, or some
combination of both.
Given an effective international regime, emissions trading provides a powerful incentive for
nations to reduce below the amount required and then sell excess reductions to others who in turn
avoid more costly actions. The U.S. has proposed that emissions trading be permitted among all
countries that agree to a binding emissions target.
How it would work
Consider a simplified example for how international emissions trading might work. Country A
and Country B must reduce emissions by 100 tons each. It might cost each country $1,000 to reduce
100 tons individually for a total cost of $2,000. However, if Country A could reduce its emissions by
200 tons for a total cost of $1,500 and sell half of these reductions to Country B, the overall target
would be achieved for $500 less, a savings of 25 percent.
U.S. experience
Emissions trading is being used successfully at the domestic level to reduce sulfur dioxide
emissions (which cause acid rain) under the Clean Air Act. Achieving targeted reductions was
originally estimated to cost $5 billion annually if traditional controls had been required and $4 billion
with emissions trading. A GAO estimate after the initial stage of emissions trading now puts the cost
at $2 billion per year, or 60 percent below the original estimate with pollution reductions significantly
ahead of schedule. Emissions trading has also been successful in cutting the costs of phasing out
leaded gasoline and in curbing the production of chlorofluorocarbons which deplete the ozone layer.
Cost savings
According to the 1997 Economic Report of the President, international emissions trading for
carbon dioxide could lower the cost of reductions by 50 percent below the minimum achievable using
purely domestic programs.
FACT SHEET ON JOINT IMPLEMENTATION
October 22, 1997
Description
Joint Implementation (JI) is an innovative, market-based approach for addressing global climate
change that uses international partnerships to achieve low-cost reductions in greenhouse gas emissions.
Under JI, a company in the United States invests in a project which reduces emissions in another country
and uses those reductions as a less expensive means of meeting its own target. The U.S. has proposed that
a formal regime that gives credit for JI projects be part of a new climate change agreement.
How it would work
Consider the example of a project announced today as part of a pilot program on joint
implementation instituted by the United States. Two U.S. companies (Solar Electric Power and Light of
Washington, D.C. and Trexler and Associates, Inc of Oak Grove, Illionois) will work with Renewable
Energy Services Company of Asia, Ltd. to market and install 812,000 solar home systems in Sri Lanka.
These systems will replace the use of kerosene lamps for lighting and the use of diesel-electric charging
of lead-acid batteries for powering small home appliances. The result will be a 1.5 million metric ton
reduction in greenhouse gas emissions and cleaner energy for tens of thousands of people.
U.S. experience
Under the U.S. pilot program on JI (formed under the existing climate change convention), 28
projects have been approved in 12 countries, including Costa Rica, Bolivia, the Czech Republic, and
Russia. These projects span a range of technologies, including solar, geothermal, and wind power; fuel
switching for district heating; biomass energy; and reforestation. U.S. companies and organizations already
participating include Commonwealth Edison, Wisconsin Electric Power, Kenetech Windpower, Sealweld
Corp., American Electric Power, PacificCorp, Detroit Edison, Clean Air Coalition, and many others.
Benefits
Lower costs: JI provides a strong incentive for companies and countries to search the globe for the lowest
cost ways of reducing greenhouse gas emissions.
Expanded exports of U.S. technology: The enormous potential for JI projects around the world creates
major opportunities for the increased sale of U.S. energy efficiency and alternative energy technologies.
Technology transfer: Increased reliance on more energy efficient technologies and less carbon-intensive
energy alternatives will help developing countries meet their growing energy needs with more
environmentally sustainable solutions.
FACT SHEET ON POTENTIAL BUILDINGS SECTOR SAVINGS
October 22, 1997
The buildings sector also produces approximately one-third of total U.S. emissions. There is
substantial opportunity to improve the energy efficiency of our buildings and the appliances in them.
Many of these technologies improve the quality of service delivered (i.e. higher quality lighting), and
have also been documented in a number of cases to improve productivity. According to a recently
released report from five of the nation's energy laboratories, programs such as the ones below can
reduce emissions in the buildings sector in 2010 by 25 million metric tons even with no increase in
energy prices.
Standards: Substantial carbon emissions reductions in 2010 can be achieved through existing authority
of the Department of Energy to establish market-oriented efficiency standards for appliances, such as
refrigerators and air conditioners. The Department of Energy uses a consensus-based approach in
which manufacturers, environmentalists, consumer advocates, and the states work together to develop
applicable standards.
Voluntary Programs: Significant carbon reductions in 2010 could also be achieved by expanding
voluntary programs such as the joint EPA-DOE Energy Star program. Energy Star labeling has
already transformed a number of markets. For example, it has cut the energy used by computers,
monitors, and printers by 50 percent at virtually no incremental cost. It is now being extended to
dozens of other products.
Adopting Best Electricity Engineering Practices: Electronic equipment consumes electricity in stand-
by mode (even when not being used) generating 12 MMTs of carbon emission each year. Preliminary
analysis suggests that 80 percent of that could be saved through adopting best engineering practices
without reducing service.
Research and Development: Designing buildings with advanced technology can reduce energy
consumption by 25 to 50 percent without increasing the building's initial cost. The extra cost of some
of the energy-efficient equipment is offset by the smaller required heating and cooling system.
Combined Heat and Power: As in industry, we can reduce the carbon intensity of the buildings sector
by accelerating the use of combined heat and power (CHP). Two CHP technologies-small turbines
and proton-exchange membrane (PEM) fuel cells-can convert natural gas to useful energy with 80 to
90 percent efficiency, significantly cutting carbon emissions from a building.
FACT SHEET ON POTENTIAL TRANSPORTATION SECTOR SAVINGS
October 22, 1997
The transportation sector produces approximately one-third of total U.S. emissions. According
to a recently released report from five of the nation's energy laboratories, programs such as the ones
below can reduce emissions in the transportation sector in 2010 by 73 million metric tons even with no
increase in energy prices.
High Efficiency Cars And Light Trucks: The goal of the President's Partnership for a New Generation
of Vehicles is to produce cars that are three times more efficient than current vehicles with no
compromise in size, safety, comfort or cost. The objective is a production prototype vehicle with a fuel
efficiency of 80 mpg in 2004 and commercial availability soon after. A variety of efficient
technologies such as hybrid vehicle design, advanced engines, regenerative braking and lightweight
materials are under development. These technologies are also applicable to light trucks and sport
utility vehicles, so that a PNGV for these heavier passenger vehicles is quite possible with an expanded
research effort.
High efficiency heavy trucks: Ongoing federal R&D on advanced diesel engines and lightweight
materials have the potential to substantially reduce carbon emissions from heavy trucks. These
technologies are projected to be available by about 2003 and be quickly adopted by trucking
manufacturers since energy is a major cost component of freight transportation (a truck typically gets 7
to 8 miles per gallon while traveling over 50,000 miles a year).
Advanced Efficient Aircraft and Rail: Ongoing federal R&D on advanced aircraft engines, improved
airframes, and air traffic control have the potential to improve aircraft energy efficiency by 35 percent,
with an additional increment of carbon emissions reductions achieved by increasing the efficiency of
trains.
Low-Carbon Fuel: Government-industry R&D partnerships have brought the cost of ethanol from
cellulosic waste (such as crop waste) and dedicated crops (such as switchgrass) from $3.60 per gallon
in 1980 to $1.20 per gallon today. Such fuels are carbon neutral because the crops capture carbon
dioxide when they grow and release it during combustion.
FACT SHEET ON FEDERAL ENERGY MANAGEMENT
October 22, 1997
Aggressive energy management can substantially reduce carbon emissions from the activities of
the Federal government, which has the nation's largest energy bill at almost $8 billion per year.
Significant strides have already been made --energy consumption per square foot in Federal buildings is
down 15 percent and energy use in civilian and military vehicles is down about 27 percent from 1985
levels. However, we can do much more.
The initiatives below will reduce Federal emissions of greenhouse gases through enhanced focus
on energy efficiency and renewable energy. They address areas which can deliver the greatest energy
savings, best leverage private sector funding and improve the Federal procurement system.
1. Expand Energy Savings Performance Contracting
Expand use of Energy Savings Performance Contracts. ESPC uses private investment capital and
expertise to accomplish energy and cost saving projects in Federal facilities. When a private sector
firm which has invested in federal energy efficiency improvements is fully repaid from its share
of the delivered savings, all additional savings accrue to the government. Streamlined ESPC
contracts put in place by DOD and DOE are beginning to speed large investments in energy
projects at Federal facilities. However, use of ESPC's is still limited in the Federal government.
The Office of Management and Budget will lead an effort to increase their use. It will include new
policy and budget guidance for agencies. ESPC authority can also be extended to other areas
including:
Leased Federal buildings. These include buildings where the Government either pays for the
energy use directly or in other building where ESPC can provide a better lease for the Government.
Federal mobility. There may be great potential for energy savings from more efficient energy use
in aircraft, ships and vehicles.
Water conservation. Water conservation projects save energy because each gallon contains energy
from pumping, heating, chilling or treatment.
Non-federal facilities where the Government makes indirect payment of energy expenses. These
include, for example, National Guard facilities which the state owns but where the Federal
Government covers utility expenses and public housing facilities which are Federally supported
but owned by public housing authorities.
State and local government facilities. Federal energy experts can help transfer ESPC techniques
to state and local governments so they can access this important approach to energy efficiency.
2. Improve Federal Procurement of Energy Efficient Technology
Accelerate the development of Product Energy Efficiency Recommendations. These cover products
that are in the top 25 percent of their class for energy efficiency or have Energy Star ratings, for
example electric motors and air conditioning chillers. They provide a guide to Federal purchasers
of the energy efficiency level to request in a specification or procurement.
Establish as standard practice, the purchase of energy efficient products for Government use.
Traditionally, federal purchases have been based on lowèst price, ignoring the substantial savings
many energy efficient products can achieve over their life. The Executive Office of the President
will lead an interagency team to streamline and update Executive Orders and procurement practices
to encourage the acquisition of these products. Use of alternative contracting vehicles to acquire
energy-efficient products will be encouraged, and purchase of products in the top 25 percent of
class for energy efficiency or conforming to Energy Star standards will become standard practice,
subject to necessary exceptions. The initiative will be augmented by publication of a "best
practices" buying guide and expanded training of purchasing decision-makers.
Use consolidated purchasing to stimulate markets and lower prices. Consolidated Federal
purchasing can stimulate commercial markets for new and emerging products which offer greater
energy efficiency, lower operating costs, and sales opportunities for small businesses that produce
these products.
Increase Federal procurement of renewable energy. In states that have implemented retail
competition in their electricity industry, Federal facilities will work with their suppliers to ensure
that the facilities purchase competitively supplied non-hydro renewable energy at levels equivalent
to the percentage specified in that state's retail competition legislation.
Report Federal Agencies' Contributions to Reduction of Carbon Emissions. This initiative will
develop an appropriate measurement methodology to convert currently available data on Federal
energy use to carbon emissions to aid national carbon reduction efforts.
3. Building for the 21st Century
Establish a new level of excellence for Federal building construction and renovation that
incorporates energy efficiency, quality, affordability, and sustainability. By using the latest
construction techniques and tapping the knowledge of the building community and local partners,
agencies will work to ensure that new Federal buildings achieve energy efficiency increases of 30-
50 percent by 2000 as compared to existing facilities. This will be accomplished through a "whole
building" approach that treats buildings as integrated systems rather than a series of independent
component selections.
Deploy solar technologies in Federal buildings. Show Federal leadership by installing solar
photovoltaic and solar thermal systems on 20,000 Federal roofs by 2010 in support of the
President's 'Million Solar Roof Initiative'. Utilize alternative financing methods to provide the
rapid infusion of investment necessary to support the cost-effective installation of these systems.
Expand the use of combined heat and power generation at Federal facilities. Combined heat and
power makes greater use of the waste heat produced in the generation of electricity.
Use biomass fuels in Federal boilers. Biomass would come from agricultural and wood waste and
methane from landfill and treatment plant operations.
Expand public awareness of energy efficient technologies. By showcasing energy efficient and
renewable energy technologies at National Parks, Federal offices, embassies, military bases, and
other facilities the public will be more aware of their potential to reduce pollution and lower costs.
Seek increased resources for civilian agency staffing to expand energy management activities and
complete energy efficiency projects. In recent years, budgets for energy management in several key
agencies have been cut by more than 80 percent. These Federal appropriations often provide the
most cost-effective funding for Federal energy efficiency projects.
4. Improve Aircraft, Ship, and Heavy Vehicle Fuel Efficiency
Public-Private partnerships to improve the energy efficiency of Federal aircraft, ships and
vehicles. Energy use in Federal aircraft, ships and vehicles, predominantly in the military services,
is responsible for 43 percent of the $8 billion Federal energy bill. This initiative would improve
the energy efficiency of main propulsion systems, with particular emphasis on medium and heavy
diesel engines and high performance turbine technology. The initiative -- designed along the lines
of the Partnership for a New Generation of Vehicles -- would involve a partnership between
Federal agencies and the private sector. Advances under this initiative will have significant
application in commercial markets. In addition, the initiative will focus on near-term energy
efficiency opportunities such as lighting retrofits on ships.
Increase the use of alternative fueled vehicles (AFVs) in the Federal fleet. Federal agencies are
increasing the use of alternative fuel vehicles which, among other things, helps reduce emissions
of greenhouse gases. This initiative would enhance the focus of the current program on AFVs such
as electrics, hybrid-electrics, natural gas and renewable-fueled vehicles.
5. Greenhouse Gas Assessments
Federal agencies will be required to assess their greenhouse gas emissions in major actions they
undertake.
FACT SHEET ON U.S. GLOBAL CHANGE RESEARCH PROGRAM
October 22, 1997
Background: The U.S. Global Change Research Program (USGCRP) is a National Research Program
conducted under the auspices of the National Science and Technology Council (NSTC) Committee on
Environment and Natural Resources. The NSTC is a cabinet-level council established by President
Clinton in November 1993 to coordinate Federal science and technology efforts. The program's
fundamental purpose is to increase understanding of the Earth system, and of human and naturally
induced changes in the Earth's environment, and thus provide a sound scientific basis for decision
making on global change issues. The USGCRP began as a Presidential Initiative, and was codified by
the Global Change Research Act of 1990. The overall FY 1997 USGCRP budget was $1.81 billion.
The core program of the USGCRP is focused on four key scientific areas:
Seasonal to Interannual Climate Variability: The development and refinement of forecasts of
seasonal and interannual climate variability, including study and prediction of the El Niño phenomena.
Climate Change Over Decades to Centuries: Analysis and projection of the effects of long-term
climate change on natural resources, public health, and socio-economic sectors.
Changes in Ozone, UV Radiation, and Atmospheric Chemistry: Research on the causes, rate,
magnitude, and human health and ecological consequences of changes in stratospheric ozone, UV
radiation, and atmospheric chemistry.
Changes in Land Cover and Terrestrial and Aquatic Ecosystems: Research on the causes and
consequences of land-cover changes, and on basic processes governing the functions and structure of
terrestrial, aquatic, and marine ecosystems.
New Research Directions: Global change research is providing the information about the changing
Earth system, and in particular, about climate change, that is needed to achieve a sustainable future.
New research efforts include:
A National Assessment of Climate Change Impacts to aggregate information across regions and
sectors, analyze national-scale consequences, and support development of mitigation and adaptation
strategies.
Improved Regional-scale Analyses, including regional estimates of the rate and magnitude of climate
change, analyses of the environmental and socio-economic consequences of climate change in the
context of other stresses, and integrated assessments of the implications for society and the
environment of climate change.
Regional Workshops to examine the vulnerabilities of various regions of the United States to climate
change.
FACT SHEET ON PNGV
October 22, 1997
Announced at the White House on September 29, 1993. by President Clinton, Vice President
Gore, and the CEOs of the domestic auto makers, the Partnership for a New Generation of Vehicles
(PNGV) is a partnership between the U.S. Federal government (7 agencies and 20 federal laboratories)
and Chrysler, Ford, and General Motors that aims to strengthen America's competitiveness by
developing technologies for a new generation of vehicles. Its programs include research support for
over 350 automotive suppliers, universities, and small businesses.
PNGV's long-term goal is to develop production prototypes of an attractive, affordable car that
can meet all applicable environmental and safety times and achieve up to three times the fuel efficiency
of a comparable automobile sold today. This would mean that a typical midsize car would be able to
achieve 80 mpg. The partnership also aims to (i) improve automotive manufacturing, and (ii)
introduce efficiency technologies into production vehicles as soon as they are economically justified.
There are numerous reasons for pursuing PNGV, including:
Environmental: Automobiles are a major contributor to atmospheric carbon dioxide, a major
greenhouse gas. Already, concentrations of carbon dioxide are 25 percent higher than pre-
industrial levels and are expected to double within the next century. Since the number of
registered vehicles in the United States is expected to climb from 194 million in 1993, to as
many as 270 million in 2010, PNGV's success is critical to any program of controlling US and
world greenhouse gas emissions. It will also result in low cost methods for controlling the
emissions that contribute to urban air pollution.
Reducing U.S. Dependence on Foreign Oil: The United States currently imports 50 percent of
the oil we consume -- this share is expected to grow to more than 60 percent by 2010.
Petroleum imports make up ten percent of our country's import inventory and account for a
large chunk of the nation's trade deficit. This dependence on foreign oil makes the United States
vulnerable.
PNGV Status Report: The industrial partners are now in the process of selecting technologies that
will be included in concept vehicles that will be completed by the turn of the century. The federal
agencies are working to revise their research priorities to support both technologies that can be
incorporated in production prototypes for 2004 and that can be integrated into even more advanced
vehicles that would be designed in later years.
The goal of the program, while extremely ambitious, still seems possible given the advances in key
technology that have been achieved during the life of the program. These include advances in
production of low-cost, light-weight materials for the vehicle body and frame; electrical control
systems, batteries; and compact, inexpensive fuel cells -- including the new technology for using
gasoline to power fuel cells announced yesterday; and, advanced internal combustion engines for use in
hybrid vehicles.
FACT SHEET ON FUEL CELLS
October 22, 1997
THE BREAKTHROUGH: A gasoline-powered technology that would allow you to double the fuel
efficiency of a car and emit half the greenhouse gases and virtually no other air pollution. For the first
time, gasoline was used to produce electricity from a pollution-free fuel cell, allowing the use of the
existing gasoline infrastructure. Previously, fuel cells have been powered by hydrogen or methanol,
which are less convenient for use in cars.
The Department of Energy, together with Los Alamos National Laboratory, and A.D. Little, have
developed a breakthrough fuel processor, which can extract hydrogen from gasoline and other fuels
such as ethanol and natural gas. Last week, this fuel processor was combined with a fuel cell from
Plug Power to demonstrate for the first time that a fuel cell electric car could be fueled by gasoline or
ethanol. This eliminates the limited driving range and lengthy recharging times associated with
electric cars that run on batteries.
WHAT IS A FUEL CELL: The fuel cell converts the chemical energy of a. fuel directly into usable
electricity and heat without combustion. Fuel cells are similar to batteries in that both produce a direct
current by means of an electrochemical process, but fuel cells can operate indefinitely as long as fuel is
supplied to them. Fuel cells can provide power for cars and other applications, such as electricity and
hot water for buildings.
The Department of Energy working with its partners has brought down the cost of proton exchange
membrane (PEM) fuel cells by a factor of twenty in the last ten years. Continued R&D, coupled with
the economies of scale from mass production of fuel cells as they enter the marketplace, should allow
us to maintain this pace of cost reduction for another decade.
PARTNERSHIP FOR A NEW GENERATION OF VEHICLES (PNGV): The fuel cell
breakthrough was accomplished as part of President Clinton's PNGV initiative, an innovative
partnership between the government, the national laboratories, the big three automakers, and their
suppliers. PNGV's goal is to develop a family-sized vehicle with triple the fuel efficiency of today's
cars, without compromising cost or convenience.
POTENTIAL GREENHOUSE GAS REDUCTIONS: One-third of the nation's carbon dioxide
emissions comes from the transportation sector, primarily cars. Fuel cell technology alone can directly
double fuel efficiency and cut carbon dioxide emissions in half. In combination with other PNGV
advances, such as lightweight materials and regenerative breaking, fuel cells will allow a tripling of
fuel efficiency and a further reduction in greenhouse gas emissions. Powering the fuel cell with
renewable fuels, such as ethanol, could eliminate automotive greenhouse gas emissions entirely in the
long run. The buildings sector also generates one-third of the nation's emissions of carbon dioxide. A
building that uses the electricity and hot water from a fuel cell fueled by natural gas would have about
half of the greenhouse gas emissions of the average building today. Plug Power expects to introduce
fuel cells for homes and other buildings in 2000 that will provide electricity for less than_the current
residential rate. By 2010, fuel cells in buildings could be providing emissions savings of five million
metric tons of carbon.
FACT SHEET ON PATH
October 22, 1997
What is PATH? We are working to develop a partnership for 21st century housing bringing together
government and industry to develop, demonstrate and deploy housing technologies, designs and
practices that can significantly improve the quality of housing without raising the cost of construction.
The Partnership for Advancing Technologies in Housing includes government (DOE, HUD, EPA,
Labor, Commerce, FEMA, and DOD) and industry working together develop, demonstrate and deploy
housing technologies and practices so that homes can be built cheaper, more environmentally
sustainable, more disaster resistant, and provide a safer working environment.
PATH has a five-part approach:
Industry-driven research on new technologies and practices
Working with industry on pilot programs building thousands of marketable houses
Streamlining of federal, state and local codes and regulations
Judicious use of existing authority on standards
Information campaign to influence consumer demand
R&D: Support more funds for accelerated research and demonstration of inexpensive, highly efficient,
highly attractive housing. Link with million solar roofs program.
Standards: The success of PATH will in some part be based on utilizing existing authorities on
standards for a select few products that have the potential for great savings. There are five
appliance/products currently under review by DoE; Clothes Washers, Ranges/Ovens, Ballasts,
Residential water heaters, transformers. Of these, the Clothes Washers and Water Heaters seem to
have greatest potential.
Creating Markets: The key to making the Partnership successful will be the ability to create markets
and consumer demands for homes that meet the PATH goals. The Partnership will work with states
and communities to help them understand the benefits of building these homes, and the opportunities it
affords the communities for economic growth. The Partnership will attempt to gain agreements
between communities that PATH homes can go through an expedited permitting process.
Education and Outreach: Marketing the benefits of these homes to consumers and to encourage
consumers to begin to ask for homes that are built to the quality level of >PATH= homes. This will
need to be an intensive campaign of getting the message out to communities, builders and developers.
This will provide incentives for more and more builders to want to build these homes.
Pilots: The pilots will play an important role in the success of PATH. The pilot sites will begin of
developing the markets and demonstrate the feasibility of the homes. The pilot sites can also act as
training sites for builders and community leaders to learn about the benefits of the technologies and as
a classroom for training on how to use the technologies. Sites under consideration are Stapleton
Airport, Denver (Redevelopment of old airport site near downtown) and Florida (Working with the
State to link energy and environment to disaster resistance and affordability).
Regulatory Streamlining: Working with states and communities on making the code approval process
more efficient and less time consuming.
FACT SHEET ON POTENTIAL INDUSTRY SECTOR SAVINGS
October 22, 1997
The industrial sector produces approximately one-third-of total U.S. emissions. We can cut
emissions substantially in this sector through the right mix of tax incentives, accelerated research and
development, electricity restructuring, and environmental regulatory reinvention. According to a
recently released report from five of the nation's energy laboratories, programs such as the ones below
can reduce emissions in the industrial sector in 2010 by 28 million metric tons even with no increase in
energy prices.
Increasing Energy Efficiency: Energy audits encourage systematic approaches to energy efficiency
that typically have high yields. Southwire Corporation, a large manufacturer of wire, rod, and cable,
cut their use of natural gas by 60 percent and cut electricity use by 40 percent per pound of product
produced. Motors consume 70 percent of industrial electricity used, and there is room for improving
their efficiency. The Greenville Tube Company, for example, increased productivity by 15 percent,
increased energy efficiency by 30 percent, reduced scrap by 15 percent, and achieved $77,000 per year
savings -- a 6 month payback -- by improving the efficiency of their motors.,
Cogeneration (Combined Heat and Power): New technologies available in the industrial sector will
allow us to capture the waste heat the U.S. now throws away. With the right policies, industrial
cogeneration of natural gas or biomass could cut annual carbon emission significantly by 2010.
Advanced turbines developed by DOE with industry will be available in three years (orders are already
being taken). They have an overall efficiency of 80 percent to 90 percent, produce steam together with
low-cost electricity and significantly reduce NOx emissions. These turbines can run on natural gas or
biomass. Some industries have their own low-cost biomass feedstocks (for example, black liquor
gasification in the pulp and paper industry), which makes possible cogeneration with nearly zero
carbon emissions.
Expanding Industries of the Future: The seven most energy-intensive industries-steel, aluminum,
petroleum refining, chemicals, pulp and paper products, glass, and metal casting-account for about 80
percent of the carbon emissions in U.S. manufacturing and more than 90 percent of the hazardous
waste. Industry, partnering with the Department of Energy, has developed long-term visions of
energy-efficient, low-polluting, highly competitive "Industries of the Future" as well as technology
roadmaps to identify an R&D and deployment pathway to achieving the vision. Visions typically
foresee annual energy efficiency improvements of 1.0 percent to 1.5 percent for two decades.
FACT SHEET ON POTENTIAL BUILDINGS SECTOR SAVINGS
October 22, 1997
The buildings sector also produces approximately one-third of total U.S. emissions. There is
substantial opportunity to improve the energy efficiency of our buildings and the appliances in them.
Many of these technologies improve the quality of service delivered (i.e. higher quality lighting), and
have also been documented in a number of cases to improve productivity. According to a recently
released report from five of the nation's energy laboratories, programs such as the ones below can
reduce emissions in the buildings sector in 2010 by 25 million metric tons even with no increase in
energy prices.
Standards: Substantial carbon emissions reductions in 2010 can be achieved through existing authority
of the Department of Energy to establish market-oriented efficiency standards for appliances, such as
refrigerators and air conditioners. The Department of Energy uses a consensus-based approach in
which manufacturers, environmentalists, consumer advocates, and the states work together to develop
applicable standards.
Voluntary Programs: Significant carbon reductions in 2010 could also be achieved by expanding
voluntary programs such as the joint EPA-DOE Energy Star program. Energy Star labeling has
already transformed a number of markets. For example, it has cut the energy used by computers,
monitors, and printers by 50 percent at virtually no incremental cost. It is now being extended to
dozens of other products.
Adopting Best Electricity Engineering Practices: Electronic equipment consumes electricity in stand-
by mode (even when not being used) generating 12 MMTs of carbon emission each year. Preliminary
analysis suggests that 80 percent of that could be saved through adopting best engineering practices
without reducing service.
Research and Development: Designing buildings with advanced technology can reduce energy
consumption by 25 to 50 percent without increasing the building's initial cost. The extra cost of some
of the energy-efficient equipment is offset by the smaller required heating and cooling system.
Combined Heat and Power: As in industry, we can reduce the carbon intensity of the buildings sector
by accelerating the use of combined heat and power (CHP). Two CHP technologies-small turbines
and proton-exchange membrane (PEM) fuel cells-can convert natural gas to useful energy with 80 to
90 percent efficiency, significantly cutting carbon emissions from a building.
FACT SHEET ON POTENTIAL TRANSPORTATION SECTOR SAVINGS
October 22, 1997
The transportation sector produces approximately one-third of total U.S. emissions. According
to a recently released report from five of the nation's energy laboratories, programs such as the ones
below can reduce emissions in the transportation sector in 2010 by 73 million metric tons even with no
increase in energy prices.
High Efficiency Cars And Light Trucks: The goal of the President's Partnership for a New Generation
of Vehicles is to produce cars that are three times more efficient than current vehicles with no
compromise in size, safety, comfort or cost. The objective is a production prototype vehicle with a fuel
efficiency of 80 mpg in 2004 and commercial availability soon after. A variety of efficient
technologies such as hybrid vehicle design, advanced engines, regenerative braking and lightweight
materials are under development. These technologies are also applicable to light trucks and sport
utility vehicles, so that a PNGV for these heavier passenger vehicles is quite possible with an expanded
research effort.
High efficiency heavy trucks: Ongoing federal R&D on advanced diesel engines and lightweight
materials have the potential to substantially reduce carbon emissions from heavy trucks. These
technologies are projected to be available by about 2003 and be quickly adopted by trucking
manufacturers since energy is a major cost component of freight transportation (a truck typically gets 7
to 8 miles per gallon while traveling over 50,000 miles a year).
Advanced Efficient Aircraft and Rail: Ongoing federal R&D on advanced aircraft engines, improved
airframes, and air traffic control have the potential to improve aircraft energy efficiency by 35 percent,
with an additional increment of carbon emissions reductions achieved by increasing the efficiency of
trains.
Low-Carbon Fuel: Government-industry R&D partnerships have brought the cost of ethanol from
cellulosic waste (such as crop waste) and dedicated crops (such as switchgrass) from $3.60 per gallon
in 1980 to $1.20 per gallon today. Such fuels are carbon neutral because the crops capture carbon
dioxide when they grow and release it during combustion.
Questions and Answers on President's Climate Change Proposal
DRAFT -- 11:30 a.m. October 22, 1997
Q:
Don't economic models suggest that this effort will cost more than 1.5 million jobs
and tank the economy?
A:
Some models may suggest that, but only by ignoring several key elements of the
President's plan:
1. They ignore the President's $5 billion package of tax cuts and Federal R&D: To
spur energy efficiency and the development of lower-carbon energy sources, the
Administration supports a major new package of tax cuts and R&D spending amounting
to $5 billion over five years.
2. They ignore the potential for increased use of existing energy-efficient products: As
the Department of Energy's 5-Labs study illustrates, many existing technologies produce
win-win solutions to reducing carbon emissions -- but nonetheless are still not widely
used. The President is committed to expanding their reach. The models referenced
assume little change in the penetration rate of existing energy-efficient equipment.
3. They ignore the President's Federal energy initiative: To reduce greenhouse gas
emissions from Federal sources, the Department of Energy will spearhead a
comprehensive effort that includes expanded performance contracting to make Federal
buildings more energy-efficient, improved Federal procurement practices, establishment of
a new level of excellence for Federal building construction and renovation, and
partnerships to improve the energy efficiency of Federal aircraft, ships and vehicles.
4. They ignore electricity restructuring: To spur further efforts to clean our air and
deliver a down payment on greenhouse gas emission reductions, while saving consumers
billions, we will pursue a bold plan to restructure the energy sector. It is time to change
the rules that are often more than 70 years old -- stifling innovations that can save money
and impede newer, cleaner technologies.
5. They ignore international emissions trading. Two key components of the President's
plan are his support for an international system of emissions permit trading, and his
commitment that developing countries must participate in the international effort.
International trading can substantially reduce the costs of emissions reductions.
6. They ignore the economic costs associated with climate change itself. Climate
change will lead to increased flooding, sea-level rise, and other dislocation. So looking
just at the impact of reducing emissions on GDP is misleading.
1
Finally, we all must admit there is much uncertainty over cost projections that are a decade
or more in the future -- after all, a decade ago, we could never have predicted that we
would now have an unemployment rate below 5 percent, core inflation below 2.5 percent,
and a budget deficit substantially under $50 billion. That's why the President has
proposed a graduated, three-stage approach with regular reviews -- starting with a period
of voluntary action, tax incentives, R&D, and Federal efficiency improvements, and
followed by an evaluation period before the internationally binding period. Only after we
have accumulated ten years of experience with the first two stages of the program would
we enter the internationally binding period.
Q:
Didn't the 5-labs study conclude that carbon prices would have to rise by $50 to
reach 1990 levels by 2010, and isn't that on the optimistic side?
A:
The 5-Labs study examined a scenario in which there was no international trading and no
electricity restructuring legislation, and concluded that the permit price would have to be
$50 to reduce emissions to 1990 levels by 2010 without such elements. But the
President's plan emphasizes international trading and developing country participation,
and includes a commitment to properly crafted electricity restructuring. [A DOE analysis
that combines international permit trading and electricity restructuring with the results of
the 5-Labs study suggests that a permit price of $25 or lower in 2010 would allow the
country to meet its target and timetable.]
Q:
Doesn't the President's plan amount to the largest energy tax increase in history --
$200 billion a year or more?
A:
Not at all. The President's plan includes tax cuts, not tax increases. It does not involve
tax increases at all.
Follow: but isn't a permit system just like a tax?
A:
No. There are several critical differences between a permit system and a tax. [For
example, a permit system provides insurance that a given quantitative target will be met,
whereas a tax does not.] In any case, the permit system does not begin until we have
accumulated ten years of experience with tax incentives, R&D, Federal energy efforts,
early credit, and the other components of the President's initial action plan.
≈:
How can you possibly reduce emissions to 1990 levels by 2008-2012 without
imposing excessive costs on the economy?
A:
The President believes that climate change is a critical challenge facing the country,
and that if we make this a top priority, we can accomplish significant emissions
reductions at low cost. In this effort, it would be irresponsible not to explore all
possible avenues for low-cost emissions reductions. That's why the President has
2
proposed a graduated, three-stage approach -- starting with a period of early
credit, tax incentives, R&D, and Federal efficiency improvements, and followed by
an evaluation period around 2004. He has proposed regular economic reviews, to
ensure that the economic costs are not excessive. Only after we have accumulated
ten years of experience with the first two stages of the program would we enter
the internationally binding period.
Q:
Won't this plan lead to massive shifts of U.S. industry and jobs abroad?
A:
No. The President has made very clear that we will not assume binding obligations
without the participation of developing countries.
I would also note that non-tradeable sectors account for a substantial share of
carbon emissions. Transportation and buildings, for example, account for roughly
two-thirds of U.S. emissions. For these sectors, the "competitiveness" argument
seems largely irrelevant.
In most manufacturing sectors, furthermore, energy costs are a small percentage of
total costs. According to the 1995 Annual Census of Manufactures, energy costs -
for manufacturing industries averaged just 2.2 percent of total costs.
Q:
How is the president's initial action plan different from the Climate Change Action
Plan that the Administration has already adopted?
A:
The first stage of the President's climate change proposal differs from the Climate Change
Action Plan in four critical ways:
It includes substantially more funding. The President's proposal includes funding
for carbon-reducing activities of $5 billion over 5 years -- substantially more than
current funding for the climate change action plan. Activities under the Climate
Change Action Plan are estimated to reduce CO2 emissions by 95 million metric
tons in 2010 -- and doubling the funding should lead to more reductions. [Total
reductions needed in 2010 are 390 million metric tons.]
[Funding for the Climate Change Action Plan in FY 1995 was $184 million, in FY
1996 $158 million, and in FY 1997 $163 million. Total funding for climate-related
activities is somewhat higher -- but still less than $500 million per year -- because
items such as PNGV are not included in the Climate Change Action Plan
definition.]
Crucially, the President's proposal now includes binding targets. In expectation of
these binding targets, firms and households will begin to adjust their behavior
today -- a factor that was not present in the climate change action plan.
3
To provide further incentives for firms to take action now, the President has
indicated his strong support for developing an early credit program of appropriate
rewards for those who take prompt early action.
Finally, the President has indicated his support for environmentally-friendly
electricity restructuring, which has the potential to reduce emissions.
Q:
Hasn't the climate change action plan failed to reduce emissions?
A:
Total emissions are higher than anticipated when the Climate Change Action Plan was
adopted several years ago, because of stronger economic growth, lower energy prices, and
reduced funding for Congress. But the partial effect of the activities under the current
Climate Change Action Plan is to still estimated to be a reduction in CO2 emissions of 32
million metric tons in 2000 and 95 million metric tons in 2010 (and all greenhouse gas
emissions of 76 million metric tons in 2000 and 169 million metric tons in 2010). The
President's three-stage plan includes substantially more funding than the Climate Change
Action Plan -- and thus could produce substantially more reductions in carbon emissions.
[390 million metric tons of CO2 reductions are needed in 2010 to move from business-as-
usual to 1990 emissions levels.]
Q:
Will you submit any agreement reached at Kyoto to the Senate for its advice and
consent?
A:
We honor and respect the U.S. Senate's important role in providing advice and
consent to the ratification of treaties. We would anticipate the need for Senate
advice and consent to any international agreement adopted in Kyoto that would
impose binding commitments on the U.S. to control emissions.
Q:
Will the President or Vice-President go to Kyoto?
A:
We have not made final decisions about the membership of our delegation in
Kyoto.
Q:
What is the President proposing that developing countries do as part of his
proposal?
A:
Today, the President emphasized that the United States will not assume binding
obligations under the climate treaty without developing country participation.
The President believes we can engage developing countries on this issue in ways
that are good for them and good for us. He believes that developing countries
have an opportunity to chart a different energy future -- one based on clean and
cheap technologies.
4
The President spoke about this issue in each country he visited in Latin America
last week. Throughout his trip, he shared his, conviction that we can and must
work together on this problem, in ways that benefit us all. He plans to raise this
issue with Jiang Zemin next week.
≈:
Why did the U.S. propose such a modest target and timetable, which is weaker than
any of the proposals to date, including from the European Union and Japan?
A:
The President has put forward a strong target that is realistic, achievable and
pragmatic, not just rhetorical. We have backed up those proposals with a three-
stage domestic implementation plan. And we have called for a comprehensive
international framework that will ensure that all countries participate in a global
effort to reduce emissions at the least cost.
Keep in mind that some of these other targets aren't all they seem to be. The EU
derives enormous benefits from a 1990 baseline -- Germany, for example, gets to
claim credit for all the cheap reductions that were a fortuitous consequence of
reunification.
With regard to Japan, a careful examination of their proposal shows that we are
not so far apart.
Q:
Isn't it true that this proposal doesn't actually reduce emissions at all but instead
just stabilizes them at a certain level?
A:
No. Our proposal involves real and meaningful reductions. Consider that under a
business-as-usual scenario, U.S. emissions are predicted to be 28% above 1990
levels by 2010.
We also stipulate that further reductions, below the 1990 baseline, would be
achieved in a second emissions budget period.
Q:
Given how far apart countries seem to be in their stated positions, is it realistic to
expect any kind of agreement in Kyoto?
A:
We are hopeful that all countries will come to Kyoto with an open mind, prepared
to negotiate an agreement that provides real and achievable gains.
No agreement is better than a bad agreement. The U.S. will continue to insist that
any international framework include realistic, achievable targets; flexible
implementation mechanisms like emissions trading and joint implementation; and
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the meaningful participation of developing countries.
Q:
What happens if there is no deal in Kyoto?
A:
We are hopeful that all countries will come to Kyoto with an open mind, prepared
to negotiate an agreement that provides real and achievable gains.
Even if we cannot reach agreement in Kyoto, climate change will remain a top
priority issue for this President. The U.S. will continue to work on building
support for a comprehensive international framework that involves all countries in
a common effort to meet this important challenge.
And we will get busy on the elements of the President's plan that we can start right
away.
Q:
Does the climate change science justify near-term action? Aren't the uncertainties
still too great?
A:
No. The fundamental science of climate change is clear. Greenhouse gas
concentrations in the atmosphere are rising as a result of human actions. These
increased concentrations are warming the planet, and unless we reduce our
emissions, the effects on our climate are likely to become increasingly severe.
Uncertainties do remain. We are not sure exactly how fast the planet will warm or
which regions of the world will suffer the worst impacts. Yet what we do know is
more than enough to justify taking the kinds of sensible actions the President has
proposed.
As for the skeptics who would have us do nothing, they represent a tiny fraction of
the scientific community. On the other hand, the Intergovernmental Panel on
Climate Change, including 2,000 of the world's premier climate experts, has
underscored the seriousness of the climate change problem and the need for action.
As part of his proposal, the President has called for additional scientific studies
focused on key areas, including a call to the National Academy of Sciences to
examine the issue of establishing a long-term goal for stabilizing atmospheric
concentrations of greenhouse gases.
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