CFR Senior Fellow Michael A. Levi, who directed the Council's Independent Task Force on global climate change, says the United States needs to show the world how reducing carbon emissions can be balanced with economic growth. Levi says in the Bush administration climate change became mired in domestic discussions, whereas it is really a significant foreign policy issue. The purpose of the Task Force report, he said, was to put the issue “back where it belongs in the context of American foreign policy, to look at a broad foreign policy strategy that could draw on the various tools the United States has available to try to steer international efforts in a productive direction.”
You directed this Independent Task Force on global climate change that has just published a report. What was the purpose of this report?
Climate change for a long time has been a foreign policy issue. George H.W. Bush signed and the Senate ratified a United Nations framework convention on climate change back in 1992. In 1997 you had debate on the Kyoto Protocol. In the George W. Bush administration climate change has suddenly become a domestic policy issue. The focus was in Congress and when you focus on Congress you look at things through a domestic glass. The point of this task force was to pull back and put this back where it belongs in the context of American foreign policy, to look at a broad foreign policy strategy that could draw on the various tools the United States has available to try to steer international efforts in a productive direction.
Is this different from earlier efforts at limiting smog, for instance, or acid rain?
Traditional pollution issues differ in a couple of significant ways from climate change. One is that they are fairly local. So you emit pollutants—they may affect folks downwind and they can actually affect people often at a great distance, but they are not truly global as in the case of climate change. Related to that, most local pollutants come out of the atmosphere quite quickly. So if I implement regulations to develop new technologies and reduce my emissions, for example, of sulfur dioxide, which causes acid rain, this leads very quickly to cleaner air and to a cleaner environment. With carbon dioxide, and even more so with some other greenhouse gases, it takes an extremely long time, hundreds of years or more, for this stuff to get out of the atmosphere. That's why it can mix globally. So, you do have this global situation, but at the same time the bulk of the world's emissions come from a relatively small number of countries. And this has always been an issue. Climate change is a global problem that requires a global solution.
Can you name the small number of countries?
The leading emitters in the world are China, the United States, Japan, the European Union, Russia, Brazil, Indonesia, and India. Not necessarily in that order, but those are the eight biggest emitters in the world responsible for about 75 percent of global carbon-dioxide emissions.
Do the governments or the peoples of these various areas agree that this is a problem that has to be dealt with?
There's broad agreement that this is a problem that has to be dealt with. Where the agreement stops is on how to deal with it, on who should be taking the biggest steps, and who should be paying for those steps. And different countries perceive the dangers in different ways. The countries that are the most directly vulnerable in a near-term sense are not the ones with big emissions. Small, low-lying islands, for example, that can be vulnerable to sea-level rise. Their emissions don't matter much.
"The United States needs to join in showing that low carbon development is consistent with robust economic growth."
And the different countries have conflicting incentives for how they deal with the activities. For instance, there are big social and political implications in a country like Brazil if efforts are made to control deforestation. And in the United States, trying to control industrial and power emissions has effects throughout the economy. Each of these countries has different challenges and constraints to work with.
Now let's talk about the United States. The recommendations in your report suggest that there would have to be constraints on the use of energy. How would that figure into everyone's pocketbooks?
We endorse a cap-and-trade approach, which would, in the near term at least, raise energy costs. The projections in standard economic models show relatively small increases as long as you do this sort of thing gradually. You also need to do things in a way so that the burden isn't imposed on the most vulnerable people in the economy, or on communities that are dependent on things like coal mining, for example. In the context of the energy price rises we've seen recently, whether in electricity prices or in gasoline prices, the sorts of price increases that are projected from potential climate legislation are minimal. Now that doesn't mean that we won't be in for surprises, and we need to be prepared to craft legislation in a way that stabilizes the costs and that lets us revisit and revise what we're trying to do as we learn more both of the upsides and the downsides.
China and India don't want to sign on to a worldwide agreement on limiting emissions. How do you get around that?
We say a few different things. First thing, let's distinguish between China and India. Those are different kinds of challenges and China is a more immediate challenge. China's emissions are much larger than India's and they're growing rapidly. India will ultimately be quite important but Chinese emissions are substantially higher. We say in our report that the United States should not sign a grand global deal if that deal doesn't involve commitment by problem countries like China. That doesn't mean that everyone needs to sign up for the same sort of fix. The United States may sign up, as we recommend, to targets for reducing its emissions. With a country like China, what you'd like them to do is to sign up to commitments to particular actions that you're actually going to have control over. Whether it's things like fuel economy standards, whether it's on electricity pricing, on controlling emissions, things like this, where the government can actually control the outcome.
"In the context of the energy price rises we've seen recently, whether in electricity prices or in gasoline prices, the sorts of price increases that are projected from potential climate legislation are minimal."
We want the United States to lead by taking action at home but then to use a wide range of levers to try and get China to move in the right direction, and to try to get them into some kind of global treaty with one of those levers.
What should we be doing here?
The United States needs to join in showing that low carbon development is consistent with robust economic growth. That means adopting mandatory emissions reductions and working through that and showing that it can succeed in cutting emissions without making a significant dent on economic growth. It also needs to do that because the United States is responsible for a large fraction of global emissions. If the United States doesn't control its emissions it swamps what other countries are doing.
But it can't be a cap-and-trade system all by itself. You need to supplement it with other things. The United States needs to be taking action in directly reducing dependence on foreign oil in ways that improve its energy use and its climate change situation. It needs to use regulations in careful ways. Things like improving building efficiency. Buildings are responsible for something on the order of 30 percent of U.S. greenhouse gas emissions.
Really? Just from the heat?
From the heat, from the electricity, from things that are very inefficient. The government needs to step in and help support research and development where the private sector isn't necessarily going to step up to the plate up front. And we also need to work on energy infrastructure. If people keep on blocking natural gas pipelines and terminals, and nuclear waste disposal, and if we don't put it in the regulatory framework for moving power at a national level, we're going to massively limit our options for reducing emissions. When you limit your options for reducing emissions, you drive your cost up so we have to be very careful about that.
Is the technology out there now already that would allow some coal-burning factories to reduce carbon emissions?
There are plenty of technologies out there but there is no silver-bullet technology solution to these things. When you look at coal, you look at a variety of ways to reduce emissions. The first is to burn coal more efficiently—using less coal to produce the same amount of power. That's number one. Number two is switching to other fuel sources and in different applications, whether that's cleaner burning fossil fuels like natural gas, or renewables, or nuclear. In different kinds of settings, different things can work. Another option that people look at is called carbon capture and sequestration (CCS). It's used in certain applications where the carbon dioxide is prevented from entering the atmosphere. What people would like to see in the longer term is capturing it and storing it—storing it for the very, very long term. That hasn't been demonstrated at commercial scale and that's something that we really have to focus on. Put it in the ground, or deep underwater, there are a variety of options.
And you may figure out how to do it in the United States but that doesn't mean you can apply that in China, for example, where you're building two coal-powered plants a week. So you need international cooperation to demonstrate and test the technologies that are necessary in the kinds of places where you're going to need to implement them.
Do you talk in the report much about increased use of nuclear power, which doesn’t emit carbon dioxide?
We talked about nuclear foreign policy because when you look at simulations of pathways to significantly reduce emissions internationally you inevitably see a substantial use of nuclear power. So we come out with two basic conclusions. The first is that as long as it's economical, we're strongly supportive of the growth of nuclear power in countries that already have nuclear power. And if you look at projections of what needs to be done to meet these emissions reductions goals, much of that growth will happen in countries that already have nuclear power. China already has nuclear power, the United States already has nuclear power, India already has nuclear power.
"Just like scientists tell us that no one technology is going to solve the problem, there's no one diplomatic solution that's going to solve it."
At the same time we are much more skeptical about the growth of nuclear power in countries that don't have it already. We think you need to sort out in particular problems of nuclear proliferation. You have to be confident that you are not saving the planet as it were at the expense of giving everyone the potential for a bomb. So these are two very different cases: countries that already have nuclear power and countries that don't already have nuclear power. But it's hard to see a path where nuclear power isn't a significant part of the solution.
Is progress in the United States related to a comprehensive world accord?
U.S. domestic action is essential but the rest of the world isn't going to simply move into action because of what the United States does. We're going to have to move on a variety of fronts. Just like scientists tell us that no one technology is going to solve the problem, there's no one diplomatic solution that's going to solve it. It's not just going to be a big deal between the United States and China. It's not going to be Kyoto 2 that's going to solve it. We need a few different prongs to our approach. First, we do need to try and get a new global agreement that involves commitments from all the major countries. And that's going to be very difficult to get.
Because China and India wouldn't be interested?
It's important to pursue a variety of efforts to steer countries cooperatively in a constructive direction. The centerpiece of our recommendation is for what we call Partnership for Climate Cooperation that would bring together the world's biggest emitters to focus on specific actions to reduce emissions. Countries would make somewhat less formal commitments to either take actions at home to reduce emissions or to provide incentives to others to reduce emissions. The idea is to really free countries up to enter into uncharted territory in transforming the world's energy systems. And it's difficult to sign up for this part of a global agreement to do dramatic things where you don't necessarily have confidence that you can do them. In a less formal setting you may be able to get countries to step up and make much more ambitious commitments to do things. We talk a lot about the different tools you can bring to the table in doing that, whether there are different mechanisms for financial support for emissions reductions [and] cooperation in research development demonstration projects.