David M. Rubenstein Senior Fellow for Energy and the Environment and
Director, Maurice R. Greenberg Center for Geoeconomic Studies, Council on Foreign Relations
Douglas Dillon Fellow, Council on Foreign Relations; Strategic Advisor, New York Governor Andrew Cuomo’s Reforming the Energy Vision Initiative
Energy Reporter, Wall Street Journal
Vice President, National Program & Outreach, Council on Foreign Relations
Experts discuss the effects of global climate change, including the role of emerging technologies, and offer policy recommendations in advance of the Paris climate summit later this year, as part of CFR's Academic Outreach Initiative.
Learn more about CFR's resources for the classroom at CFR Education.
FASKIANOS: Good afternoon. Welcome to the Council on Foreign Relations. I’m Irina Faskianos, vice president for the national program and outreach here at CFR. And I would like to welcome you our annual Back to School event. This is the first time we’re holding it here in Washington, DC. As you probably know, the Council on Foreign Relations is headquartered in New York and we are a national organization with offices here in this beautiful building.
This event is part of CFR’s Academic Outreach Initiative, which provides a forum for professors and students to interact with CFR experts and join the foreign policy debate. In addition to hosting events such as these, workshops for students and educators, we also have an academic conference call series which if you’re not already participating in, you should. You can access them on our website, to sign up for them. We livestream CFR meetings of heads of states and panel discussions. And we’re also livestreaming today on our website, www.cfr.org, and also on YouTube. You can follow us on Twitter @CFR_Academic.
We’ll begin today with a brief introduction to our resources on climate change. We’ll follow it by a panel discussion on this topic. And then we’ll round out the afternoon with a networking sessions so that you can have the opportunity to meet with representatives from various departments at CFR and learn more about our work and what it’s like to work here. We encourage you to live-tweet this event using the hashtag #CFRBackToSchool, but do turn off the ringers on your phones, please, so we don’t hear your phones ringing.
To kick things off, we’re going to play the introductory video to CFR’s InfoGuide on the Arctic. Our InfoGuides are a multimedia series that promote understanding of complex foreign policy issues, and the feature maps, timelines, other graphics to help you understand the environmental risks of a melting Arctic and the policy options for building a sustainable future in the Arctic. So we will show that now.
BORGERSON: In some respects, the Arctic is the least explored part of the world. We know more about the surface of the moon than we know about the Arctic. One thing that scientists universally agree on is that the Arctic is warming. The ice is melting rapidly, allowing all kinds of access to new resources and geographies that heretofore have been frozen and locked away. And that rate and pace of change is having profound implications for the region and for the world.
BYERS: When I think about the Arctic, I don’t think about the Arctic in isolation. I think about it in terms of its location in the center of some major geopolitical developments—the so-called reset between the United States and Russia, the crisis of global climate change, the development of China as a major economic actor who is dependent on shipping to have access to resources and markets. The Arctic is in the middle of all of this.
CONLEY: Oil and gas resources, mineral resources, fisheries, tourism, shipping—all of these factors are profoundly shaping the new geoeconomics of the Arctic. They could be transformative for the global economy, as far as shipping and mineral resources, but certainly a huge boost to the Arctic states—Russia, Norway, Denmark via Greenland, Canada, and the United States. International law and the United Nations Convention on the Law of the Sea gives those five coastal states the right to explore those resources in their exclusive economic zone, or EEZ, 200 nautical miles from their coast. And if you can prove that your outer continental shelf extends, you can exploit and explore those resources on the sea bed.
HARPER: Canada’s new government has put the north higher on the domestic policy agenda than it has been for half a century. All Canadians need to recognize there is a convergence of economic, environmental, and strategic factors occurring here that will have critical impacts on the future of our country.
CONLEY: Should these important shipping routes open, like the northwest passage, which goes through Canadian territory, and the northeast passage or the northern sear route, which goes above Russia, it could cut off shipping times between East and West. And then beyond the 200 nautical mile exclusive economic zone will be international waters. We call it the doughnut hole. And it’s that circle around the North Pole that are the high seas. And so there are non-Arctic states like China, other Asian countries, as far afield as India, are saying, well, eventually we can explore those resources. Those are international waters.
BORGERSON: The Arctic has a rapidly changing environment. In some cases, it has blurred borders. It has very rich natural resources. And in the past, that could lead to increased competition and perhaps military friction. However, recent years show that Arctic nations are actually working in a concerted way towards collaboration and cooperation through organizations such as the Arctic Council, through bilateral agreements, and through a whole host of multilateral regimes based upon the solid bedrock of the U.N. Convention of Law of the Sea. But it’s something that the world should definitely keep an eye on. In particular, how Russia chooses to behave in the new Arctic neighborhood will be very important in terms of how the Arctic develops.
PUTIN: (In Russian.)
LARUELLE: Russia’s strategy is largely driven by the need for Russia to be able to use the Arctic region as a base for its energy needs in the future. On the international side, I think it’s mostly an issue of prestige and international recognition of Russia as being one of the key, if not the key actor in the Arctic.
BYERS: The Arctic Council was established as part of an effort to engage Russia in the post-Cold War era. And the Arctic Council has grown into a regional organization. It has stepped up to the plate as the place where multilateralism takes place in the Arctic.
CONLEY: The Arctic isn’t a crisis today. Even though you sometimes see headlines that say the new Cold War and the race for the resources, it’s an area of cooperation. But we have to think in the long term and make some difficult choices about how we spend our precious resources and how we protect our precious environmental resources.
SCARONI: We believe that the Arctic is a new frontier for oil and gas. It is going to be relatively expensive oil and gas, nothing cheap over there. But if you think that the oi prices are going to be 90 (dollars), $100, it’s still competitive.
OULAHSEN: It’s a disaster waiting to happen. We can see the Arctic sea ice melting in front of our own eyes and instead of seeing that as a huge threat to mankind and the planet, oil companies are rushing into the Arctic to drill for the oil that caused climate change in the first place.
BYERS: The Arctic is changing, but it’s not becoming safer. And to reduce those risks, companies and countries will have to invest literally billions of dollars. Arctic governments will have to decide whether they’re prepared to take decisions together that will raise the costs of Arctic development, internalize some of the externalities, and perhaps put something of an economic disincentive on some of the excitement about economic development that we currently hear.
BORGERSON: The United States, like the other Arctic nations, needs to make investments into hard infrastructure—air fields, roads, ports and ships—to operate there. We need to chart the Arctic. We need better research and bathometric data. So this begins with really a change in attitude of the Arctic’s increasing relevance and centrality to international relations.
FASKIANOS: Great. We have several other InfoGuides on our site that you should take a look at on different topics. Another excellent interactive resource from CFR is a Global Governance Monitor, which tracks international cooperation on a variety of issues. It includes a dedicated section on climate change that provides a comprehensive list of core agreements, institutions and agencies, an interactive map of the top 20 emitters, and a section on policy recommendations for strengthening the word’s capacity to tackle the challenge of climate change.
We have a report card which evaluates and gives grades on how the world is doing at addressing climate change. This is our expert bank of global think tank leaders from the Council of Councils. And they gave global efforts to combat climate change a grade of a C-plus, not very good. They found that given the potentially devastating consequences of global warming, efforts to curb emission and promote alternative energy remained inadequate.
We have blogs. We have many blogs on different issues. This one is on science and foreign policy surrounding climate change—I encourage you to follow them—Energy Security, and Climate blog, and it features frequent posts written by experts Michael Levi and Varun Sivaram, who you will be hearing from in just a few minutes.
We have research links that are especially useful for classwork. These are collections that bring together trusted new sources, data, and historical information on select topics on an easy-to-navigate page. This one here is on, obviously, energy and environment. And it is updated on a regular basis.
We are the publisher of Foreign Affairs magazine. Foreign Affairs has an excellent series of anthologies that offer a curated selection of the best articles from both the print magazine and ForeignAffairs.com. The Green Book is a great resource for articles on the environment, natural resources, energy, climate change and more. It’s available online and also as an ebook. And we have a special offer for students, which you can find out about after this.
Lastly, for professors in the room, I would also like to highlight our teaching notes which are designed to help educators develop course syllabi. They include discussion questions, classroom activities, essay prompts and supplemental reading lists to accompany our books, reports and meetings. We have created teaching notes for each InfoGuide. And in this case, you see the notes for the Arctic InfoGuide.
So I hope that you will go to CFR.org and ForeignAffairs.com regularly for your research, your studies, and beyond, your professional development. I would now like to turn, invite our distinguished speakers, Michael Levi and Varun Sivaram, to the stage. Will you come up? (Applause.) And I will turn the proceedings now over to Amy Harder, who is the energy reporter for The Wall Street Journal, and will run this conversation. So, Amy, over to you.
HARDER: Great. Well, thank you so much, Irina. It’s great to be here. Good afternoon. Can everybody hear me OK? (Off mic)—my mic is on. OK, there it is. (Laughter.) Well, I want to remind you that this event is being livestreamed and there’s audio and video available on the CFR website later today, I believe, or tomorrow. And we invite you to engage on Twitter. The hashtag is #CRFBackToSchool. So you got to keep your twitter thoughts even shorter, because you have to fit that hashtag in.
I think Irina mentioned our panelists, but I want to briefly introduce them again. This is Varun. He’s a fellow here at the Council and an advisor to New York Governor Andrew Cuomo’s Reforming the Energy Vision Initiative. And that’s Michael. He is senior fellow for energy here at the Council and director of the Maurice R. Greenberg Center for Geoeconomic Studies.
So I want to briefly lay out the conversation we’re having today on global efforts to address climate change. But first I have a quiz question for all of you in the audience. Please raise your hand if you know where the United Nations is holding its climate conference later this year. That’s a pretty good number. It’s Paris, France. Sadly, I will not get to go, but I should just go to Paris at another time when I don’t have to be working so hard.
So we’re going to talk about the conference and just the broader efforts of global climate change. It’s such a fascinating issue. It covers everything from emerging technologies, to economics, to air pollution, to diplomacy, to poverty, to, of course, traditional energy sources. So we’re going to try to tackle all of that at once. We’ll be talking for about 30 minutes, and then we’ll toss it out to you guys for some questions. So please be thinking of questions you would like ask us here up on stage.
So I just wanted to turn it to you guys now for kind of laying the groundwork on the context of Paris, and what we can expect to happen there. So, Michael, I want to start with you. Can you briefly discuss the history of the U.N. climate talks, in two minutes or less?
LEVI: So the U.N. climate talks have been going on for over two decades. And the short version is they went on for several years without much action from countries. Then we had the Kyoto Protocol in the late 1990s, which mandated cuts from rich countries, but none from poor countries. Some of the rich countries met their goals, other didn’t. And the poor countries didn’t—they continued to boost their emissions. Then we essentially had another round of efforts that culminated in the Copenhagen climate conference in 2009 and a follow-on the next year. And the big shift there was to include all countries and efforts to reduce emissions. But through that—and let’s say, modest emissions reductions.
The distinguishing characteristic through that date was that people focused on what we would typically call a top-down approach. They tried to figure out how much each country should do in order to reduce emissions, and then summed that all up and tried to get those countries to commit to those particular goals. It didn’t work as well—(audio break)—
HARDER: —and this year there’s going to be some 3,000 journalists there. There’s going to be a lot of attention. It’s interesting, this year—the conference lasts for two weeks. Usually the heads of states and people like President Obama would come for the last couple of days. But this year, they’re actually flipping it, and the heads of states are coming at the beginning of the conference, which I’m under the impression that that’s to lower expectations from the onset, which is sort of an interesting way to go about things. And that brings me to my question for you, Varun. I mean, there’s always so much attention. Is it too much attention?
SIVARAM: You know, I think the process has learned from the last time around. In Copenhagen, there was a last minute scramble to really just get some kind of accord done. This time around, you’re right, the heads of state will only be there right at the very beginning. And it’s not so much lowering expectations as the process this time around has front-loaded the work so that over the course of this calendar year we’ve seen lots of countries—in fact, every major economy now has delivered their intended nationally determined contribution, their commitment to what they’re going to do on climate action. They’ve already delivered it. And so the heads of state are going to go to Paris, they’re going to have a photo op, and the foreign minister are going to conclude a difficult but not impossible round of negotiations. So I think this time around the process is a little more realistic—the expectations are more realistic than last time around.
HARDER: Maybe the headlines won’t be quite as sweeping as they were with Copenhagen. Of course, reporters are the only people who really care about things like that. We’ve had a lot of news lately on each country’s commitment to this—to these climate talks. So all the countries around the world have been submitting their stated commitments. And just this week, we got some news on India. And India is the third-largest emitting country in the world and has been sort of an outlier in terms of its stated commitments to do something on this issue. And I know that you both have been following this closely, and Varun you’ve been following it very closely. But, Michael, I want to go to you first. Do you see India’s commitment—just from a bit 30,000 foot level, without getting into the weeds of what they’ve actually put on the table—do you think the fact that they’re at the table is a turning point for the climate discussions?
LEVI: I don’t know that it’s a turning point. India fits oddly into the international climate discussions. I tend to think of India’s commitments typically as a floor on what they’ll do. India has often in the past been willing to do considerably more than it’s been willing to commit to do, all right? It doesn’t want to put something forward and underperform. Now, there may be a new wrinkle on it this time about, and what I know about that I learned from Varun.
But here, my sense I that they’re playing it safe and that if you really want to see what India’s going to do and really want to influence what India is going to do, you have to focus on enabling, and empowering, and encouraging them to do more on the ground. And I think that’s a central thing to keep in mind as we think about climate diplomacy throughout, right? I would much rather have bad targets and good outcomes than good targets and bad outcomes, right? The targets and the goals only matter insofar as they change the outcomes. The outcomes are what matter in the end.
HARDER: Varun, let’s dig in just a little bit on what India put on the table and whether or not you think it’s sufficient.
SIVARAM: Absolutely. So India’s commitment that was announced yesterday evening sets out the following targets: They want to reduce their emissions intensity by 33 to 35 percent by 2030. That’s a weird word. It’s not that they’re committing to reduce their emissions. They’re committing to reduce their greenhouse gas emissions intensity. That’s how much CO2 they put in the air, divided by what their GDP is. And so what they’re saying is they want to start to decouple how much CO2 pollution it takes for an extra unit of growth—economic growth. That’s different from other commitments. For example, the United States in their commitment said that they would reduce emissions—not intensity, but absolute emissions by 26 to 28 percent in 2025. And so India’s commitment is a different sort of commitment.
The next thing that they promised to do was to ensure that 40 percent of their power generation capacity was renewable energy. And that’s a little misleading, so I want to dig into that. India has a very ambitious renewable energy goal. They want to have 175 gigawatts of renewable energy by 2022. But that doesn’t mean that India’s energy is going to come 40 percent from renewable sources, because renewable power plants like wind and solar produce power a lot less predictably than other sorts of power plants, for example coal power plants. So when India tells you that it’s got 40 percent of its power generating capacity from renewables, the actual energy it’ll get from those renewable sources is quite a bit less.
HARDER: How much—how much renewable energy does India get—does India burn for its electricity today?
SIVARAM: Less than 10 percent. And—
HARDER: Most of the rest comes from coal?
SIVARAM: Most of the rest comes from coal. Coal is the single largest source of India’s emissions today, and it will continue to be so through midcentury, based on India’s target.
So to sum up, India’s target is ambitious. It’s really hard to put 175 gigawatts of renewable energy in the ground, maybe even impossible. But even if they do accomplish that ambitious target, it’s not clear that their emissions are going to start coming down. In fact, they’ll probably continue to increase well through maybe even 2050. And that’s concerning for the world. It means that India’s trying its best to curb its emissions, but because of its reliance on coal its emissions are going to continue to climb.
HARDER: One of the things that India said in that agreement was that it would agree to do a lot of these pretty ambitious efforts, as long as Western countries would help it. And this is sort of emblematic of one of the biggest challenges and the biggest tug-of-wars within the climate discussion, is this tug-of-war between the developing countries—loosely identified as, you know, Brazil and India and to a lesser extent China—and then, of course, places like the U.S. and Europe. And I didn’t read the entire commitment that India put forth out yesterday, but from what I understand it was somewhat critical of what the—you know, the amount of energy that the U.S. uses and what it’s trying to do.
So, Michael, can I turn to you to kind of talk about how big of a sticking point do you think this could be? It’s been one a lot in the past over the last two decades. Do you think we’re coming to more of an equilibrium with the developing versus more advanced economies?
LEVI: Yeah, and let’s pull out beyond India, because this is an issue for every developing—almost every developing country. I think that the money discussion—you’ll see the word finance a lot in technical discussions about climate change. They mean money. The money discussion plays out on two levels.
It plays out on a practical level. The cost of cleaner technology is often higher than that of dirtier technology. And for countries that put less of a premium on reducing pollution, they want help to pay for those more expensive technologies. They want help to cover the overall cost. Also, typically, the less-polluting technologies require more money up front, even if they save you money later. And so if your financial system isn’t that good at getting you money up front in exchange for savings later, then there’s interest in getting better access to loans on different terms. So there’s a financial—there’s a financial piece to this discussion about the money. And again, these countries can move to lower emission sources without that help, but they don’t necessarily want to without that help.
There’s also, though, a political aspect to this. You saw at Copenhagen, at the last big summit, countries came, they had their emissions pledges, they weren’t amazing, but most were OK with them. But they weren’t willing to do a deal. And the thing that broke the logjam was a promise from the wealthier countries to try and mobilize up to $100 billion a year by 2020 to help the poorer countries. And that was a political move. No one had gone and calculated what that $100 billion a year would go exactly to. They hadn’t even agreed on whether it would go to reducing emissions or to helping countries deal with the effects of climate change.
But it was seen as a sign of seriousness on the part of the wealthier countries. And for a lot of poorer countries, it was something that they could claim—that leaders could claim was immediately beneficial back home, that they had done this deal and they had brought something home. They hadn’t just brought in a promise to reduce emissions in 30 years which would have an impact in 50. They had brought home something meaningful. So there’s that political piece. Now, if I look at the—
HARDER: That’s very large, I would say.
LEVI: Extraordinarily large. I think if you look up at the Paris talks, you say what could derail these? Money is way up at the top. Again, not only for the substantive reason, but for the political reason. And if I were ticking off the reasons that Paris could blow up, money would be at the top of the list.
HARDER: Varun, I want to turn back to you, and talk about something maybe a little more exciting than money and politics, which is technology. Not important—maybe not more important than money and politics, but perhaps more exciting is technology. And India is another good example of where there’s a lot of interesting technology going on in the renewable energy space, from what I understand. I talk to a lot of solar manufacturers and utilities that are looking to do business there, because they have this, you know, multibillion dollar market of people there needing electricity. And they see an opportunity there. Can you talk about some of the opportunities in India for renewable energy, and whether or not you think some of those might be a little bit too ambitious?
SIVARAM: Absolutely. To be fair, I think you’re asking two different questions. One question is about India and its potential for renewable energy—massive. The other question is about technology. And I don’t actually think that the Indian solar industry is very technology advanced, but we’ll get back to that. India has made a dramatic target to install 100 gigawatts of solar energy by 2022.
HARDER: And 100 gigawatts—let’s give the audience a little bit of an idea of what that can power.
SIVARAM: Oh, 100 gigawatts is going to be on the order of—maybe 10 percent of all of India’s energy is going to come from solar power. I mean, that’s incredible. And just two years ago, the last government only had a goal of 20 gigawatts in the same time frame, and then Prime Minister Modi came to power and he decided to up the ante. So this is great. There are companies all around the world, many of them American, who have pledged to help finance this solar power in India.
To be fair, there are still challenges. It’s going to require over $100 billion in finance, much of it from external sources. It’s going to require Indian utilities to reform themselves. Today in the United States, about 5 percent of your energy gets lost on the way from the generator to your home. In India, it’s more like 50. It’s either getting stolen from the wires or the wires don’t work very well. It’s going to take quite a bit to get to this ambitious target, but the potential is tremendous and companies around the world are interested.
Well, what about technology? Technology is a much sadder story, in my opinion, not just in India, but around the world.
HARDER: So it’s not exciting, like I said?
SIVARAM: Oh, it’s super exciting if we do it right. (Laughter.) And I think technology is intertwined with money. It’s not a separate discussion. So the solar panel that we know and love today is basically the same solar panel that was invented in AT&T Bell Labs 65 years ago—it’s the same solar panel. Nothing’s changed. And today around the world, about three to four percent of the world’s public research and development budget goes to energy. In the U.S., our energy budget is dwarfed by our space budget, by our health budget. And frankly, it’s a level of spending that’s incommensurate with the problem at hand. We need research and development that’s two, 3 X, 10 X bigger than what it is today, because new technologies are really not being deployed in clean technology.
HARDER: So I know we’ve been talking about India a lot, but I do think that country is sort of emblematic of a lot of the challenges of the climate debates across the spectrum. And one area that I find interesting, which we’ve touched on, is coal. Now, in this whole discussion of climate, there’s sort of this, you know, default position that, oh, what is country X doing to cut its carbon emissions, right, because that’s what’s happening. In Paris they’re going to talk about to what degree can we cut global carbon emissions.
So I found it fascinating when I learned not that long ago—a couple of months ago—that India’s state-owned coal company has a coal production goal. It’s trying to increase the amount of coal it’s producing. Can you imagine that happening in the U.S.? That’s almost laughable given how much this country’s moving away from coal. So that’s just a sign of how important coal is going to continue to be. And so just to broaden out, I want to ask both of you—just a very quick yes or no, that’s all. Those are the only two options. Can continued significant dependence on coal coexist with actions to cut carbon emissions to the degree that scientists say that we need to?
Don’t jump at the first chance. (Laughter.)
LEVI: Yes, given the way that you set the question up.
HARDER: (Laughs.) You can elaborate in a moment.
HARDER: That’s great. I’m glad you guys disagreed. We arranged this beforehand. (Laughter.) So, Michael, can you talk about why you think yes?
LEVI: So, I don’t think that you can continue to stay on the current path we’re on in terms of increasing coal consumption the way we consume it, and still be in a range of what anyone sensible would consider safe when it comes to climate change. But that starting point is really high, OK? The pace of coal consumption increase that we expect is enormous. And depending on which forecaster you look at, could be the fastest growing energy source in the world.
So we need to reduce coal consumption from that path a lot in order to get to any of the kinds of goals that we want to. But that doesn’t necessarily mean that you have to, let’s say, immediately begin absolute decreases in coal consumption. And I would say, frankly, even if you immediately began absolute decreases in coal consumption, the world would remain highly dependent on coal for a long time to come. So we’re not going to get into this fundamentally different world anytime soon.
The other thing I would say—and this is—you know, this isn’t as popular these days—is the carbon capture and sequestration is something that has to be part of the discussion. So carbon capture and sequestration is a technology whose elements have been demonstrated, but has not been demonstrated at a reasonable cost and scale that would take the emissions from coal-fired power plants and essentially bury them underground. It’s expensive. It’s considerably more expensive than just burning coal and letting the pollution go out into the air. It avoids the emissions.
But what’s also more expensive than burning coal right now is building a new nuclear-fired power plant. What’s also more expensive than burning coal right now is building wind and solar energy without subsidy in order to deliver the same electricity. So it’s not obvious to me that on the timescales that we’re interested in, the timescales that matter—and we need to be reducing emissions heavily not just in the next five or 10 years, but 20, 30, 40, that that technology doesn’t come into play in a large way. But it won’t, by the way, unless you have the kinds of increases in innovation spending that Varun was talking about earlier.
HARDER: And, Varun, you can elaborate on your no answer.
SIVARAM: So I think Michael and I agree on like 90 percent of what he just said, but we’re going to have different answers, yes and no. And maybe it comes down to how we want to frame the recommendations.
HARDER: One of you is a glass half-full and the other’s a glass half-empty.
LEVI: Half-full of coal is just unpleasant.
SIVARAM: I mean, I like to think I’m the optimist here.
HARDER: But you answered no.
SIVARAM: You’re right. (Laughter.) So I agree with Michael that the reality is we’re not going to be able to—the world is not going to dramatically decrease its coal consumption immediately. That reality makes perfect sense. But I do think that some drastic action, at least in the medium term, is absolutely crucial if we are to remain within anything that scientists consider safe zones for climate change. And carbon capture and sequestration I hope—
HARDER: Its nickname is clean coal technology, in case that rings a bell with some of you.
SIVARAM: I hope clean coal succeeds, right? In the United States, we currently have massive project overruns on one coal—CCS project, and there’s another in Canada that’s had mixed success. But I don’t want CCS to become a crutch for people to say, look, it’s totally find for us to continue producing coal because in the future we can count on innovation to deliver this amazing CCS technology that will then clean up all the coal. That is a very dangerous gamble. And in the interim, we better be preparing ways to wean ourselves off of coal. The adage is you hope for the best and prepare for the worst. We really need to prepare to quickly diminish our reliance on coal. And India is one of those countries that is going to be increasingly dependent on coal going forward. And I think that’s something that the world needs to focus on.
HARDER: I think it’s important to have this conversation about coal because here in the U.S. I’m sure many of you have heard about how coal is decreasing in its share of electricity, how Obama sometimes doesn’t focus on coal, and that king coal is dead, things like that. But in fact, that’s not true at all around the entire world. And frankly, when we’re talking about climate change, that’s the only thing that matter—the only thing that matters. I also—I see clean coal technology, maybe this is too much of a crutch according to Varun’s outlook, but in a Venn diagram of climate action and coal, clean coal technology is in the middle of that Venn diagram. You have climate action, and then you have coal existing. And in the middle, you have this CCS, being able to have them coexist together. Do you—
HARDER: Theoretically, yes. We can say that up here on stage. It’s a different thing to actually act it out. But kind of with that idea in mind, do you think this Paris deal, whatever it may be, could be enough of a market signal to kind of help some of these failing clean coal projects?
LEVI: Well, so let me flag two things first. First, I hate the term clean coal.
HARDER: I saw you cringe when I said that.
LEVI: The reason I hate it is because it applies to two different things. It applies to technologies that remove conventional pollutants, like sulfur dioxide from power plants, and then it gets applied to technologies that remove carbon dioxide, which are fundamentally different technologies, more expensive, less proven. And there’s a lot of sleight of hand where people will say, well, we’re doing clean coal. And they mean the first thing and they want you to hear the second things. And so I prefer to be specific about what we’re talking about.
HARDER: How do you feel about clean diesel?
LEVI: (Laughs.) Not as good as I did two weeks ago.
HARDER: We can talk about Volkswagen later.
LEVI: We can talk about that later. I also say coal is down in the United States, it is still the leading source of U.S. electricity generation. So coal companies can be either bankrupt or close to bankrupt, but we’ve got a lot of capital sunk in the industry and it’s very difficult to displace.
Is Paris a signal? I think that the actions that countries have started taking in anticipation of Paris are the biggest signal of all, right? So the United States, in anticipation of Paris, has been finalizing its power plant rule. That is a big signal, because you can’t comply with the power plant rule without heavily reducing U.S. coal use. China, in anticipation of the Paris summit, has announced a renewable energy goal, and announced a peaking—a year that it aims to peak its carbon dioxide emissions, and a goal for reducing its emission intensely. When you put all those pieces together, you can’t do that without shifting the trajectory of its coal consumption substantially. China’s also, by the way, announced a goal for peaking its coal use, so we’ll see if it’s able to meet—
HARDER: Now, you say coal consumption, but you could consume coal if it was—part of it was captured, right?
LEVI: If part of it was captured, but in the timeframe we’re talking about you’re not going to have meaningful deployment of carbon capture, right? We’re talking 2025. I don’t think that’s on the table in a material way. So those things are signals. Now, if Paris is seen as a success—you joked about journalists caring about headlines. I think the headlines really matter, because if Paris is seen as a success—and you get to decide whether it is, or your headline writer does—if Pairs is seen as a success, then everyone will believe these various commitments more. They’ll be more confident that countries will follow through on them, and they will adapt to them more. So I think that’s the way that something like Paris translates into confidence and expectations, rather than people going and looking, well, subsection 14A.1 say something about CCS, and therefore, you know, I expect it will exist in 2035. That’s not the mechanism I look for.
SIVARAM: Can I just in on this?
SIVARAM: Michael said a really important thing early on that I want to dive into. Clean coal can mean carbon capture and sequestration or scrubbing the exhaust of your coal power plant SOx, NOx, and particulate matter. That’s really important because the theme that China and India and other nations are responding to air pollution, and in their response to air pollution necessarily they’re doing to reduce their carbon emissions, is not necessarily true. If China, for example, reduces its air pollution in cities like Beijing by scrubbing what comes out of their coal power plants, they can continue to burn coal without reducing their carbon dioxide emissions.
Similarly, this Volkswagen debacle proves to us that there can sometimes be a choice between great fuel economy, which is what you get with diesel, and terrible air pollution, which is what you get also with diesel. (Laughter.)
LEVI: Certainly with Volkswagen’s diesel.
SIVARAM: With Volkswagen’s diesel. And it’s the case that in Europe, which has a far higher percentage of diesel vehicles than in the United States, cities like Paris have worse air pollution than we do in the United States because they’re getting great fuel economy, great for the climate globally, bad for the climate locally. So important thing to consider.
HARDER: And so we’ve talked a lot about coal, and I want to shift a little more now to oil and natural gas. So I’ve another audience quiz question for you all. Raise your hand if you think the U.S. is the world’s largest producer of oil and natural gas. Those your final answers? Well, you guys are all wrong. So—
HARDER: Yeah, the one right guy. Congratulations. Michael will correct me, and say that they’re the combined oil and natural gas, including liquids, but for all intents and purposes. Over the last year or two the U.S. has actually overtaken Saudi Arabia and Russia to be the world’s largest producer of both oil and natural gas. We’ve produced—we’ve increased our oil production in the U.S., mainly in places like North Dakota and Texas, more than 80 percent since 2008. Natural gas, up 20-30 percent since the same time period. And this has had, I think, a profound impact on not just the economics of the U.S., but also the politics of climate change.
So I just want to throw a very broad question to you, Michael. What kind of impact do you think this oil and natural gas boom has had on the climate debate? And before I go to that, I just want to reassure you that Pew Research poll—did a survey not too long ago, maybe last year, found only 50 percent of the U.S. population knew that the U.S. was an energy superpower. So you’re along the lines of 50 percent of the population. But, Michael, can you address that question about what kind of impact do you think this glut of oil and natural gas has had, just kind of from more geopolitical and political perspective?
LEVI: Sure, on the politics of climate policy in the United States. I’d say, maybe more people would answer the question differently if the new North Dakota oil drilling soap opera that debuted this past weekend catches on. None of you watch that? (Laughter.)
HARDER: I haven’t even seen that.
LEVI: You haven’t even seen that? Oh, come on. Anyhow, North Dakota is a very odd place to try and stage a soap opera. (Laughter.)
So I think—let me highlight two big ways that I think the oil and gas boom has affected the climate debate. And the first has actually been very constructive. We had in this country a big debate and discussion over cap-and-trade legislation starting the mid-2000s, bipartisan supporting during the 2008 presidential campaign, congressional attempts to pass legislation 2009, 2010, failed. At the time, the obvious alternative was using the Environmental Protection Agency, the EPA, to regulate carbon dioxide emissions. And the assumption among analysts was that what the EPA could do was something like tell coal-fired power plants to be 2 or 3 percent more efficient in the way they burn coal. That was kind of the governing idea.
Then we had this boom in natural gas production that made natural gas extremely cheap, and made it an affordable substitute for coal in power plants. So you started to have a decrease in coal-fired generation, no new investment in coal-fired power plants. But from a political standpoint, maybe most importantly, an option that you could require or incentivize power plants to switch to without having a large impacts on costs for electricity consumers. And that’s what we saw when the administration came out with this clean power plant. It justified fairly aggressive goals for emissions reductions, much more aggressive than what we would have envisioned five years ago, based on an assessment in part of what could be done by switching from coal to gas.
HARDER: And natural gas burns 50 percent few carbon emissions than goal.
LEVI: Right. Considerably cleaner than coal. We can talk about methane leakage later if people want to. But what you had was a political opening created by this technological market change that in turn will effect U.S. emissions in the future. So I think that’s a good thing, it opened up a political window to do something different.
The other thing that I think that the boom in oil and gas production has done to the politics of climate policy is it’s shifted a lot of advocates from focusing on the things that they used to—the things like fuel economy rules and emissions reductions directly from power plants—to opposing production of oil and gas on U.S. lands. The gas piece, I think for reasons I said before, is counterproductive. Gas has enabled us to reduce emissions. The oil piece is controversial—more oil means more emissions.
But when you—when you sort of do the math and economics, blocking supply is a lot less effective in reducing emissions than going after demand. And so I think that has distorted the politics of climate policy in this country. And so we end up with things like fights over oil exports and Keystone pipeline, which are not hugely productive one way or another when you think about climate change, rather than really drilling down on the kinds of policies that can make a big difference.
HARDER: I’m going to turn it here to questions in just a few minutes, so please be thinking of questions you would like to ask us. Varun, I want to go back to you on this question about the oil and gas boom. How, if at all, do you think low energy prices—both here in the U.S. but also importantly abroad too when you talk about global climate change—how do you think these low energy prices are impacting the shift to renewable energy?
And I want to add, of course, the caveat that oftentimes when you talk about, you know, cheap energy and then shifting to renewables, you often—people often conflate the transportation sector fuels with electricity sources. So, of course, electricity is—you know, wind and solar is primarily used for electricity, and then oil is, of course, the dominant fuel in the transportation sector. So I mean, with kind of that said, do you think low oil prices and low natural gas prices are sort of stunting the growth of renewable energy over—around the world? Or do you think they’re actually helping?
SIVARAM: That’s a great question. And I’m going to quickly make a shameless plug for—CFR did a workshop on this and we have a workshop report that says, what’s the impact of low oil prices on clean energy investment? So you guys should—
HARDER: What an ideal question for me to ask, then.
SIVARAM: Yes. (Laughter.)
HARDER: We did not plan this ahead of time.
SIVARAM: Thank you, Amy. (Laughter.)
And so you’re absolutely right. A rational person would think that low oil prices would have nothing to do with how things like renewable energy, solar and wind, perform. Ironically enough—and I recently wrote about this—ironically, low oil prices have actually scared away some investors who have invested in solar and wind companies. Now, that’s something that, you know, people believe may be transitory once—
HARDER: Why is that? Are they accidentally conflating it as well? You’d think they would know better.
SIVARAM: So, actually, yes. I do think that psychologically investors have reacted to low oil prices by divesting from renewable energy assets. So some people think it’s transitory that the market will right itself. Others are quite worried. Low oil prices certainly do have a chilling effect on clean energy investment that is a direct competitor or substitute for oil and fuels.
We also found that sometimes, it’s not just the price of oil that’s a determinate of investment in clean energy, it’s also the volatility. We found when we talked to participants in this workshop that highly volatile oil prices can serve as an incentive to invest in clean energy research, to hedge yourself from the risk of bouncing up and down oil prices. So even though it is the case that oil prices have fallen recently, the fact that the oil markets are quite volatile still provides some incentive to invest in renewable energy. So that’s how I’d answer your question.
HARDER: I want to ask one quick yes or no question of you two before we go back to the audience. So, going back to natural gas, you know, there’s been this big debate over the last seven, eight years here in the U.S. about how natural gas is helping the U.S. address climate change, President Obama has been pretty positive about natural gas. I would say that he’s been less outspoken toward the energy fuel as in the last six or so months. But generally speaking, the administration has supported natural gas.
However, in the same time period, you’ve seen a big environmental movement away from all fossil fuels, including natural gas. I’m sure many of you are familiar with fracking and the controversy around that—around that technology. And part of the driving force behind these environmental groups, including such as the Sierra Club for example, they’ve decided—they make a strategic decision several years ago to oppose natural gas. Now, that wasn’t a position they had held, you know, going back to 2007, for example. They actually supported natural gas. And in fact, the Sierra Club got money from natural gas companies.
But once it became clear that we—there was this glut and tons of natural gas underneath all these states throughout the U.S., the environmental movement decided that they didn’t want natural gas because all of a sudden there was a lot of it and it was threatening the shift to renewable energy—at least, that’s the perspective of these environmental groups. So I want to, just for the question, there is an International Energy Agency report that said that we are in a golden age of gas, the entire world was, but that actually it wasn’t going to get the world to where we needed to be on a climate reduction goal out to 2050, for example.
So kind of putting those two things—you know, climate had—natural gas has helped the U.S. cut carbon emissions and, you know, some competing analyses suggesting otherwise—can you guys say yes or no? And Michael, we may have talked about this at some point over the years but I’m going to ask you again. Do you think natural gas is a net positive for global efforts to address climate change or a net negative?
HARDER: Well, I’m glad you guys agree. We don’t need to discuss that then.
LEVI: Just to—just to—(laughter)—
HARDER: Nobody can ever just say yes or no.
LEVI: No, just to—very quickly on this International Energy Agency thing, I mean, there’s a critical point there that you can apply to a lot of things, which is: Just because one thing doesn’t solve an entire problem by itself doesn’t mean that it’s not a worthwhile and valuable tool. And that’s a great example. If all you do is go from having not a lot of natural gas to a lot of natural gas, it doesn’t solve the climate problem for you. If you go from not having a lot to having a lot and use that to change the incentives for low-carbon investment in natural gas and elsewhere, and if you use it as part of a transition to lower-carbon fuel, then it’s useful. So technological change and resource abundance are not—shouldn’t be the things that determine our destiny. They should be things that create new options that we can wisely use.
SIVARAM: And I want to tell a quick story, if that’s OK.
HARDER: Quick story.
SIVARAM: Quick story. I used to work in the government of Los Angeles. And one of the big things that the mayor wanted to do was to change a big coal power plant out in Utah that LA got its power from, to a natural gas plant. Initially, it was framed as we just want to shut down the coal plant. And to that end, we recruited the Sierra Club—
HARDER: What year was this?
SIVARAM: This was 2013. We recruited the Sierra Club, who’s more than happy to help us because the Sierra Club has this robust beyond coal campaign. And so, you know, they packed city hall and they went to all these neighborhood council meetings. And eventually we got a groundswell of support in favor of closing this plant. And indeed, we were successful in negotiating with the Utah Power Authority to close the plant. The alternative ended up being natural gas. And suddenly, the Sierra Club was a little bit uneasy about that.
I will say in their defense, though, that the Sierra Club did recognize the benefits of switching from coal to gas, that it was a dramatic improvement. The first city in the country to shut down—or to commit to closing down all of its coal power was Los Angeles. And the Sierra Club ended up being ultimately supportive. So I do want to get some color on how the Sierra Club, which has been a key player in the fight against coal, has approached this issue.
HARDER: Great. Well, I want to go to the audience now for questions. I think there’s microphones going around. And please, when you get a question please stand up and state your name and your school affiliation. Don’t be shy. Those two up here.
Q: Hi. My name’s Sam Martin. I’m a senior at the Elliott School at George Washington University.
My question is about which countries we could look towards as a model for our future goals with renewable energy. I think maybe Germany may be a good example. They had—74 percent of their overall production was from wind and solar. And as a follow-up to that, do you guys think a mixed basket is the best approach to a long-term goal?
SIVARAM: Can I take this? So I’m actually surprised—I’m not sure 74 percent is right. Maybe it’s at some points of the year, but—
Q: I think it was in—it was in 2014 in February.
SIVARAM: OK, there was a day.
Q: That was the peak. That was the top.
SIVARAM: Great, got it.
One important thing to note about Germany is Germany did this great thing. It ramped up solar and wind energy using an instrument called a feed-in tariff, or an incentive rate that all these owners of renewable energy got paid. But they also decided to shut down the nuclear sector in the wake of the Fukushima disaster. And directly after that decision, their emissions actually went up not down. So Germany is a great example of how to deploy renewable energy in a country that’s got the cloud cover of Seattle. I mean, it’s amazing, right?
But Germany may not be the best example of how to utilize a mixed bag approach, which I absolutely think is the right approach. We’re not just going to able to power this world on wind and solar alone. It will take nuclear power, certainly. And ideally, we’re going to develop technologies like carbon capture and sequestration, that Michael talked about, to round out a broad portfolio of energy options, because wind and solar alone are not going to cut it.
LEVI: I would just add, we can learn from Germany efficient ways to drive investment into solar, we can learn from Scandinavia good ways to drive investment into efficiency for things like combined electricity and heating. There’s a lot we can learn from different places. The United States is such a diverse country that it’s pretty tough to take one model from somewhere else and apply it to here. So I’m skeptical that we’re going to be able to do that.
For example, while Germany can teach us some good things, what it’s also done is it’s dealt with the reliability problems that might come with a lot of intermittent, irregular wind and solar, by just overbuilding massively, by building an enormous amount of stuff that it barely uses. That’s not efficient. That’s not a great way to grow your economy. So that’s something I would want to not learn, or actually something I would want to learn not to do from Germany. So we have—we have plenty of examples from around the world of things that work and things that don’t work. And we’re going to have to blend the best, and hope that other people learn from our experiences too.
HARDER: Some more questions, right there.
Q: Hi. My name is Adria Schwarber. I’m from the University of Maryland. I’m in the Ph.D. program, studying atmospheric and oceanic science.
And I had a question just for both of you, what you thought of the 2 degree Paris target, in that India’s INDC clearly shows that the emissions are going to continue to increase and other INDCs have indicated that we are unlikely right now to meet the PPM requirement to keep it at or below 2 degrees. And a follow up to that, if you could also add what you might think a different target option might be. Thank you.
LEVI: So I say this at too many meetings. I have this great goal of getting people in the United States to say things in Fahrenheit. So 3.6 degrees Fahrenheit? No, look, I come from a physics background. So does Varun. We’re all used to Celsius. We would say it in Kelvin if were allowed to. (Laughter.) But for an American audience, and I think there’s a lot of people with scientific—there’s some people with scientific backgrounds here—for an American audience, Celsius actually confuses and it underplays, actually, some of the real risks that we face. So let’s talk about the 3.6 degree Fahrenheit goal.
Look, I think that it is going to be extraordinarily difficult to keep the world two under a 2 degree warming, or to keep it to less than 50 percent chance of a 2 degree warming, right? There’s enough uncertainty in how we translate emissions into warming that this is all about risk reduction and odds. I think that technically and economically you can lay out a sequence of actions that would move the world to that path at a relatively modest cost. But politically, it is proving extremely difficult to get countries to make these transformations, both because it requires a large degree of international cooperation, but also because it requires very large transformations within countries that generate big winners and big losers.
So I think it’s very difficult to reach the 2 degree goal. I don’t know that it’s useful to change it, because I think the reality is that when countries come together for these efforts, they first look at what they can within their own systems, they look at the technical, and economic, and political potential. They often do try and find bits and pieces here and there to do more. And if we change the goal from 2 degrees—see, I’m breaking my own rule—3.6 to whatever 2.5 times 1.8 is—see, math lesson here—if we change it to a different goal—
HARDER: Raise your hand if you know the answer to that.
LEVI: Exactly. Who has their calculator with them? If we change it to a different goal, it’s not clear to me that countries are going to do anything fundamentally different. So with a limited amount of political capital and energy to devote in a—at something like Paris, I would rather focus on things that might get countries to increase their efforts and increase their ability to deliver on those efforts, rather than changing the target that’s only tenuously connected to what they actually do.
HARDER: But didn’t you say earlier in our discussion that you’d rather have better—like, bad commitments and a good outcome?
HARDER: Isn’t this sort of contradicting what you just said?
LEVI: No, because I’m not sure that the 2 degree target is all that closely connected to the actual real-world outcomes. So with a limited amount of diplomatic capital, I would focus on the things that help people deliver their actions rather than on haggling over the target itself.
HARDER: Right, right. Another question? The man in the tie. Two mens in ties. Raise your hand if you’re wearing a tie. (Laughs.)
Q: How’s it going? I’m C.J. (sp). I’m from Chicago. I’m studying political science at Dominican University.
And I have a question about the polar bears, since we all love polar bears. I read in a study that in 1940 there were 5,000 polar bears known throughout the world, but now there’s 25,000 polar bears and a lot of people are getting upset saying that polar bears are dying because of climate change. But couldn’t the argument be made that the amount of—the population of the polar bears has something to contribute to that?
SIVARAM: I know very little about polar bears. I’m really sorry. (Laughter.)
HARDER: Raise your hand if you know something about polar bears.
SIVARAM: All I can say here—I’m not. All I can say in response to your question is there is something—are polar bears North or South Pole? (Laughter.) I’m kidding. (Laughter.)
HARDER: Where is the Council’s wildlife expert?
LEVI: I am also—Amy only listed two of my titles. I’m also the senior fellow for polar bear studies here at the Council on Foreign Relations. (Laughter.) Look, polar bear populations are larger because there have been conservation efforts to help rebuild polar bear populations. And—I mean, look, it highlights that climate change is only one of the factors that drives things in our future. Just like climate change affects pressures on food and on refugee flows and migration, it’s not the only thing that affects food and refugees and migration. So it’s one factor. It’s an exacerbating factor in most cases that makes a lot of these different—dealing with a lot of these different challenges more difficult. But it can’t be the only thing that we focus on if we’re dealing with poverty, with ecology, with prosperity around the world.
SIVARAM: And I will quickly say, a very important take-away here is there is a new ocean opening up in the Arctic region. It has geopolitical consequences. It has climate consequences. I don’t know what consequences it has for polar bears, but—
HARDER: It sounds like you need to write a report on that.
LEVI: Polar bears.
HARDER: You can stay tuned for that. The question right there with—that one, yeah.
Q: Hi, Matthew English at the GMU School of Public Policy.
One of the popular things going on now is for coal-fired power plants to be switched over to biomass-fired power plants. And in Europe, this is qualified as being a renewable source. Do you see any pushback during the summit in December against that?
LEVI: So I think there’s pushback against it. I don’t see it during the summit in December. I mean, there is concern in Europe and there’s concern as people look at rules for U.S. emissions under the Clean Power Plan. There’s concern that you don’t essentially drive people to cut down forested lands in order to burn wood in power plants. That’s not exactly an emissions reductions measure. But I don’t think that’s the kind of thing that Paris is going to focus on.
So it’s sort of interesting how these international talks work. These international talks will focus on things like how do countries be more transparent in their emissions reductions? How do they update them over time? Can we set up centers for sharing technology? How do we govern international institutions that provide money to help with emissions reductions? But they won’t, at least at the negotiating level, deal with that sort of thing.
The other thing, though, that these international summits do that’s kind of interesting is they’re these sort of magnets for people to come together. So it’s not only the 3,000—that’s an amazing number—3,000 journalists that are going to show up there.
HARDER: Thirty-five hundred, actually.
LEVI: Thirty-five hundred, wow.
HARDER: Thirty-five and one, if I get to go.
LEVI: I thought—I didn’t even know that many journalists were still able to find jobs these days.
HARDER: (Laughs.) Unfortunately, there’s a boom.
LEVI: So if you think that’s a lot of journalists, you’re going to see even more people, even though journalists still are people. (Laughter.) You’re going to see a lot of people there. And they’re not just going to be in the negotiations. They’re going to be in all these events around the halls and exhibits and what we call side events. And they’re actually there exchanging information and learning. And I’ll make you a bet that there will be discussion going on, formal and informal, about that issue and about a whole host of other issues.
And you know, there’s no agreement that comes out of it. There’s no treaty that comes out of that. But I actually think as a sort of global governance piece, it’s one of the more valuable functions of these international summits, is that they sort of lubricate the flow of information and help regulators do their jobs better, and help technology investors do their jobs better. So that kind of thing is not on the negotiating agenda, but I actually think it gets—that kind of thing does get affected by these summits in a positive way. It’s one of the values they bring.
HARDER: Some more questions? Let’s take this woman up here.
Q: Hi. I’m Maria Luvaris (sp) from American University’s Washington semester.
My question is, how are countries, especially developing countries, facing the climate change consequences, and how those consequences affect renewable energy source goals? For example, we have Venezuela, that’s a primary hydroelectric energy—and, well, oil as well, of course—but with decreasing water levels.
SIVARAM: I think that’s a fantastic question. Another plug, yesterday Michael and I hosted two foreign ministers from the Maldives and Barbados. And I could tell you that climate change—we’re already feeling the impacts of climate change here in this country. But hearing it from those two ministers brought—really brought it home. These islands are facing not only sea level rise, which is a pretty obvious consequence, they’re facing—you know, their coral reefs are being bleached, they’re facing ridiculous storms, their fresh water source are now being eroded. They’re really in trouble.
And these are bellwether states for other developing countries, who are really going to face difficult impacts of climate change. One of the issues that is likely to be quite central to the Paris talks in the emphasis placed on adaptation efforts versus mitigation efforts. And I should tell you something that Michael and I have spent almost the entire time today talking about mitigation or reducing emissions so that we don’t have climate change. But what about the adaptation for when the world warms more than 2 degrees, for example? And developed—
HARDER: And just—I mean, this is important, because even if we stopped burning fossil fuels tomorrow, the impacts that we’ve done to the planet already are going to be around for centuries. So I think adapting is very important and does not get enough attention.
SIVARAM: Absolutely. So—
HARDER: So I’m not going to interrupt you again.
SIVARAM: That’s OK. And so as a result, developing countries are really pushing for more funding from, for example, the Green Climate Fund that Michael alluded to—they’re pushing for more funding for adaptation.
You also asked this very interesting last question, which was, what’s the feedback then for renewable energy, because you can imagine that a country that depends on hydroelectric resources can no longer use—its water levels will be too long in order to run your hydroelectric plant. You know, I haven’t done a lot of thinking on that, but I think that’s a fascinating feedback effect, that says as climate change happens its effects make it even harder to stop further climate change. Great point.
HARDER: It sounds like it’s the beginning of another great report that you can make a plug for in six months.
Another question? The man at the end, wearing a tie.
Q: Greetings. My name’s Justin Carlisle from the School of Public Policy, University of Maryland.
My question has to do a lot with the adaptation that we just talked about, and also mitigation. In developing countries, a lot of them are making significant investments in their infrastructure. And I think it might be a good idea if they coupled the adaptation when they build their new cities and their new communities, to not just focus on adaptation, but also promoting energy efficiency in those structures, because you can do a lot with community planning to make your energy grid a lot more efficient and burn a whole lot less carbon and use a lot less energy. So my question to you is, what do you think can be done to encourage that vein of development internationally?
SIVARAM: I was going to say I agree, and then you asked me what I thought.
HARDER: That’s a valid answer, as well.
SIVARAM: I absolutely agree. So first of all, the first half of the question you asked was—or the statement you made, was as we respond to the effects of climate change, surely we can be a little smarter about where we develop new developments. Surely it’s not a bright idea to go live on the coast at a place that’s right at sea level. In the United States, we’ve had limited success in doing this. But it is an intelligent development goal.
HARDER: Home sales in Miami are doing quite well, I hear.
SIVARAM: Yeah, unfortunately. But your other question, I think, was around the world, how do you get—how do you capitalize energy efficiency investments in new development? And there are good models to learn from, again. In the United States, several states have passed quite stringent energy efficiency standards. California’s one of them, where I’m from, where new buildings have to pass certain efficiency standards. They’re actually talking about making new buildings solar-ready, which means you have to make your roof strong enough to hold solar panels. But they’re also going to be retrofitted for earthquakes, they’re also going to be flood-proof. I mean, I think new building codes—as there’s a cycle of capital turn over going on in the next couple decades and we feel the effects of climate change—I think building codes are a great way to adapt and become more resilient.
LEVI: Let me just add briefly to that. One of the interesting things we’ve seen happen over recent years is that regulators, planners, mayors from different cities and regions around the world have been networking with each other, informally and formally, much more than they did in the past, and sharing the lessons from those kinds of experiences. And again, it’s not a treaty, but it makes it easier and less daunting for leaders in one place to take some of these actions if they have experience from others.
The other thing that I think is interesting and important is we’re starting to collect more data on these programs and actually learning what works and what doesn’t. Some things that on paper look like they’re fantastic for energy efficiency don’t actually do much. Others that—others turn out actually to be extremely effective. And so as we try these and we collect data on them and assess which ones work, we can deploy our money more intelligently, not just, let’s say, here, but elsewhere in the world.
HARDER: Some more questions? The woman in yellow.
Q: Thank you. My name is Christina Almonte. I’m a junior at Pepperdine University.
And a lot of times China is often criticized for setting climate change goals that it doesn’t necessarily accomplish. Like, I’m not too sure if you’re familiar with China’s 12th five-year plan. It’s just a basic development blueprint for every five-year period. So some of the targets that they set was a 17 percent decrease in CO2 emissions, per unit of GDP by 2015. And in 2014, it was just 6.6 percent. So in your opinion, what are some things that are preventing China from actually accomplishing the targeted goals?
SIVARAM: I think—you know, I would not come down as hard on China as you just did. I think China has mixed success in meeting its goals. So for example, in renewable energy China has actually blown past its wind and solar goals. I think the only goal it’s missed is its offshore wind target. But everything else, China is doing a miraculous amount of new solar and wind development. Again, if an ambitious target like what you just mentioned, the emissions intensity reduction—if an ambitious target catalyzes ambitious action that doesn’t quite make it to the target but is still a good outcome, I think that’s something to be lauded. And I think China is taking climate very seriously.
HARDER: Another question? The man on the end with—(laughter)—the guy that—the one that’s smiling. That one, yes.
LEVI: You’re trying not to say tie, aren’t you? (Laughter.)
HARDER: I don’t want to say man in the tie, because it’ll go to somebody else.
Q: Hi. Thank you. I’m Elai Rettig. I’m a visiting scholar at the Elliott School at George Washington University.
So I’d like to ask your perspective of Russia and other oil exporting countries over climate change. So, if I’m Russia, the idea of climate change and melting icebergs seems like a great idea. It opens up sea lanes for me at the north, cuts trade routes. On the other hand, carbon emission cuts is a terrible idea because my economy is based on the exploit of hydrocarbons. So how do you get countries like Russia and other oil exporters on the wagon of battling climate change? Or would you just discard them from the start and don’t count on them participating in any of these efforts?
LEVI: I think Russia is an extraordinarily difficult case for all the reasons you state, plus geopolitical ones. And typically the way negotiators approach Russia in these talks is they don’t ask much from them and they hope that Russia won’t do much to get in the way of what others are pursuing.
I think what’s more—what’s interesting—what’s even more interesting—you didn’t just say Russia, you talked oil exports generally—is some of what’s happening in the Middle East. Right now, again, Middle Eastern countries are—firstly, they’re a mix. Some of them are actually energy—oil importers. Some of them are gas exporters and see opportunities from climate action to increase demand for their product. But some are obviously big oil exporters, and they don’t necessarily love these climate talks, but they are often, again, on the ground really trying to increase their energy efficiency and increase their production from alternative energy sources, if only so that they can stop burning so much oil at home for electricity and export it for greater revenue abroad. And you’ve seen increasing pressure to do this as oil prices have fallen. So you’ve seen, for example, countries reform their fossil-fuel subsidies, increase prices of fuel to the customers in the United Arab Emirates, for example, which encourages improved efficiency and frees up oil for them for export. In Saudi Arabia you’ve had an effort for a long time to try and get more solar out there. It gets stumbled in bureaucratic hurdles, but there’s another push for it. You have a ban on the import of air conditioners, unless they’re ultra-efficient. These are slightly distinct tools from what we use in the United States to encourage efficiency. But so you have—you have steps like that.
So they’re—I don’t think they’re going to join hands and say let’s all figure out together how to get rid of oil. They might join hands and say let’s figure out how to get rid of coal so that there isn’t as much pressure to get rid of oil. So there are subtleties to this. And they might do a lot for their own sakes that happen to have an impact on climate change. So you focus on where you can be productive.
HARDER: And correct me if I’m wrong, but I understand that Saudi Arabia is the only country out of the more than a hundred involved in the U.N. climate talks that has not submitted its formal commitment to the climate talks. And I don’t think that’s a coincidence, given its energy mix.
A couple more questions. The woman right there. Yeah.
Q: Hi. My name’s Emily (sp). I am studying environmental science at American University.
And I was just wondering your guys’ thoughts on the current thoughts that are happening right now about the TPP agreement. The Sierra Club and some other environmental organizations have come out against it in regards to—I know it’s kind of secretive, but what’s been leaked about the loose restrictions on corporations for environmental concerns.
LEVI: I mean, TPP is a complicated subject. We’ll have interesting news, maybe, on it this weekend.
HARDER: That’s another pre-plug.
LEVI: Yes. By the way, TPP. No, by “we” I mean the world. I don’t—(laughter)—it’s not another study.
Trans-Pacific Partnership, big multilateral trade negotiation linking the United States, others in the Americans, and folks in Asia. There’s a lot of controversy over rules that would ostensibly allow corporations to sue states for regulations that destroy value in their companies. I mean, there’s a lot of scaremongering around this. We’ve had similar provisions in other kinds of agreements in the past, and as I understand it the United States has never lost a challenge to any of its environmental laws under one of these. So that sounds—that sounds pretty good to me.
I think, as we look forward, there’s an opportunity to use trade agreements to cement good action on environment. For example, you could use trade agreements to establish standards for making sure we avoided deforestation that was embedded in forest products that are traded. You could imagine using trade agreements to allow countries to equalize the playing field if they are taking stronger action on climate change, to make sure that others in an agreement don’t use that to essentially undermine them, to take advantage of the competitiveness gap that gets created if one country’s paying more for its emissions. So, I mean, there’s actually a potentially positive vision for environment to play within a better, more comprehensive future global trade agreement.
But, again, like you, I haven’t seen the text of this thing, so it’s impossible to evaluate it. But I’m not sort of running for the hills yet.
HARDER: Some more questions? The man right there.
SIVARAM: Without the tie.
HARDER: Without the tie. (Laughs.)
Q: Now smiling, too. (Laughter.) I’m a junior at the College of Georgetown, and I was—this question’s actually for Amy.
I was wondering that the press sometimes has problems marketing really pressing issues, and I think we saw that with the migrant crisis recently. Until it was given a face, it wasn’t really—it wasn’t marketable. With increased productions, hurricanes in D.C., and a reframing—as Michael mentioned, a reframing of the arguments from environmental groups, how do you see the media—how can the media reframe the fracking—or reframe press and coverage on fracking to make it a(n) issue that the public cares about?
HARDER: Well, I think that’s a great question. I don’t know how long we have, but. (Laughs.)
But I think, first of all, I wouldn’t use the word “marketing.” From a journalist’s perspective, we report the news as we see it. So we—I mean, I can only speak for myself—I try not to market something in any particular way. I thought the—or the comment you made, Michael, about how the headlines are very important, and the headlines come from our conversations with stakeholders. For example, the White House released a blog post today touting the climate agreement by India as a very positive step forward. Now, some people might disagree with that, and in fact it wasn’t a very strong commitment at all. But it’s the way things are packaged. And so we as the media, we really have to drill past those comments and try to understand what is actually going on instead of what is just being said, because many times, especially in a city like this, they’re not the same thing.
On the fracking debate, I think that’s been a fascinating example of how an issue that had been going on for decades and has increased in the last seven or eight years has been framed as a climate issue, because it’s not a climate issue. It’s an energy technology that, yes, has its risks, but it is not quite the bogeyman that some environmental groups have painted it as. Now, that said, I think, just like the Keystone XL Pipeline, it has been a very salient tool that environmental groups have rallied around to make climate change something that more people care about because, despite the nice comment about polar bears, I don’t think most people really care about polar bears. They care more about, you know, having something like the Keystone Pipeline that goes through people’s backyards and things like that.
You know, it’s funny. I got into a whole argument with somebody once about why Keystone was such a big deal. And this person, who’s in the administration, was like, it’s just because you in the media covered it so much. And it’s like, no, it’s not our fault Keystone is a big thing, and we covered it because it became a big deal. And so it’s sort of, you know, we’re just—we’re the mirrored reaction to what’s happening. So I think we’re constantly trying to report things the way that they are. And I think with the climate debate we’ll see a lot of coverage; 3,501 journalists will be there covering this issue, and I think it’ll fade back into the background afterwards.
And I think, very quickly, on your note about extreme weather, I think that incites coverage for a little while—you saw it with Hurricane Sandy—but I don’t think it has any sort of lasting impact on the public’s—well, I think sometimes it can have a lasting impact, but I think in terms of policy change, I think that’s—it takes a little bit more than that.
Do you have—
LEVI: No, the question was for you.
HARDER: Because journalists are real people as well, despite what Michael said earlier. (Laughter.)
Another question? Right here. The woman, yeah. Ladies first.
Q: I am Lola (sp). I’m a Master’s student at GW, at the Elliott School.
My question is specifically for Varun. Congrats on being a strategic adviser for REV. I actually am from New York and was in Upstate New York this summer trying to get the public excited about it. But what do you see as the strategic approaches that more states can implement? And what can be done at a national scale? Because it is a really ambitious plan. It is really great. The public, they like—they like the ideas behind it and they’d like to see the outcomes be positive. But what actual strategic approaches can be taken to get that done, not only in New York but in other states and hopefully nationally?
SIVARAM: That’s a great question, and I’m thrilled you’re excited about REV.
HARDER: I can tell. You look excited. (Laughter.)
SIVARAM: I’m excited, too.
The best thing that REV can do for scaling up REV—and I’ll tell you what that is in a sec—to the rest of the country is for REV to succeed. That is the best thing it can do.
So REV is Reforming the Energy Vision. It’s the governor’s vision in New York to, for once, beat California on being environmentally friendly. No, but seriously, REV is a way for New York to change the way that energy is generated and distributed to customers and used by customers. In the past we’ve had this model where you’ve got central power plants, big transmission lines and distribution infrastructure, and eventually the customer just gets power. Now we live in a world where customers have a lot more control over what they do with their power. They might have a Nest Thermostat, right? They may have a solar panel on their roof. And as this power is decentralized to customers, we need a new model for our utilities to respond and really encourage this trend, because the more decentralized your power is the cleaner it can be and also the safer you can be. A single downed power line somewhere on the East Coast is not going to shut down power for the entire coast, as it has in major blackouts.
So what REV is doing is using a state regulatory approach. You know, the—New York State’s Public Service Commission regulates those utilities. They’re using this approach to say, how can we value distributed energy resources, and how can we create a market for distributed resources to provide services to the grid in a cost-effective manner? At the end of the day, REV is going to succeed if it’s distributed energy resources, energy efficiency, solar power, batteries, microgrids—if these things can be done cost effectively. And we strongly believe that they can. And once they are done cost effectively, the rest of the country and hopefully the world is going to see that, hey, you can have distributed energy and you can do it without increasing your rates. You’ll actually increase your reliability, you’ll make your rates more affordable, and you’ll have a better energy picture with more consumer choice overall.
And other states will absolutely adopt it. I think—I think REV is the future of energy, and I’m thrilled to be working on the project.
HARDER: More questions? Right there.
Q: My name is Acelo Maver (ph). I’m a(n) international relations major at American University.
And with countries like Nigeria, where 80 percent of its exports are fossil fuels, is there really a pathway for them to reduce their emissions and reduce their drilling while remaining economically stable?
LEVI: So there’s certainly pathways to reduce emissions, right? So Nigeria, for example, can transition from the widespread use of diesel generators to use of natural gas for distributed electricity. So there’s—and there are projects like that that are happening.
But I think the bigger challenge for a country like Nigeria or another country that is dependent on fossil-fuel exports is, what happens if we get to a world where there’s a lot less demand for their products? You talked about oil exports. I don’t have a good answer for that. I think we tend to have a dialogue in this country where we basically paint every fossil-fuel exporter as evil, as an enemy. You know, we point out what bad people come from that place. And that is not a—is nowhere close to a universal phenomenon.
HARDER: Even Canada?
LEVI: Even Canada.
And we don’t actually—we don’t do the hard thinking about what happens to a country like Nigeria, what happens to a Mozambique that’s, you know, staking its future on natural gas and to some extent coal exports, what happens to a Colombia. And, you know, in part, to be frank, I think that’s because we haven’t, as a world, done an amazingly good job at reducing emissions. And so the threat of this demand evaporating is relatively remote, or at least the threat of it evaporating as a result of climate policy seems relatively remote to most people. But if we actually succeed in doing these things, I think we do have a—we do have an ethical obligation to make sure that this is not destroying the livelihoods of people around the world who don’t have a lot of other good options right now for climbing out of poverty. So no good answers, but fantastic question, and something I think people ought to be thinking about a lot more.
HARDER: We have time for one more question—oh, and one more comment from Varun before the last question.
SIVARAM: I should quickly say in response to the previous question my work on REV is not Council-sponsored. I just want to be clear there. (Laughter.)
HARDER: But it’s still a big endorsement of REV. (Laughter.)
SIVARAM: (Laughs.) Absolutely.
HARDER: One more question. And you—the woman in the maroon. Yep. Please make it a good one, it’s the last question. No pressure.
SIVARAM: No pressure. (Laughter.)
Q: My name is Sara Eisemann. I’m a first-year M.A. student at Johns Hopkins SAIS.
I wanted to go back to the discussion about CCS and looking at it through a perspective of investment. So you talked about, you know, CCS is more expensive than coal, but so are renewables and so is nuclear—although I’m more interested in the renewable side. So how do you see the path forward for how we should apportion investment resources? You know, should we be looking at ways to keep—to make coal more attractive, or should we be investing in other choices?
LEVI: So I think—I suspect we each have views on that.
Look, I think in the long run you need to put a price on carbon in one way or another. That means making people pay for the pollution that’s involved. So coal-fired power produces more pollution than gas-fired power which produces more pollution than these others. This is—we’re talking carbon pollution. And so if you put a price on carbon and it becomes substantial enough, then all of these zero-carbon resources compete, and the one that’s most cost-effective once you include the cost that it imposes on society through pollution wins out. I think without that you don’t get something like carbon capture and sequestration. It is plausible that you could get renewable energy costs below those of coal and that becomes attractive in its own right. Same with nuclear.
With carbon capture and sequestration, what you’re doing is you’re taking a coal-fired power plant and you’re putting a gizmo on it that costs money that does nothing for you except for reduce the pollution. So unless someone’s making you pay for the pollution or saying you’re not allowed to do it, there is no chance you are going to put that gizmo there and pay for it. So you have to change the financial incentives in order to get that money to flow.
SIVARAM: And I want to quickly say Mike’s just given you the economist answer: you put a price on carbon and the market will work things out. I happen to think that that’s true, but on top of that you also need to support innovation.
And in carbon capture and sequestration, there is this dichotomy between what you hear in the press about existing projects that are—you’ve got the Kemper project that’s well over cost in the Southern company. And on the other side of the dichotomy is the excitement you see in scientific journals. So just recently there was a really cool breakthrough with a fancy material called, for anyone interested, a covalent organic framework that—
HARDER: I’m very excited about that.
SIVARAM: Thanks. (Laughter.) That sequesters carbon in a much more efficient way than the technologies we have today. That’s great. However, technologies like that are not going to see the light of day unless we really ramp up the funding for innovation because, although Michael’s right that putting a price on carbon is an important step, putting a price on carbon is a necessary but insufficient condition for catalyzing the kind of innovation that we really want. And, no pun intended, covalent organic frameworks catalyze the carbon sequestration reaction.
HARDER: Say that 10 times fast. (Laughter.)
So in addition the economic and innovation parts of this, I would say perhaps the biggest—as a member of the press I would say this—I think the political hurdles to these debates are very large. And I’m actually going to ask one very brief question, and because we’re ending—we’re near the end of our time you guys can only answer yes or no, and there’s no opportunity to elaborate. So—(laughter)—you know, we’ve talked for a while about all the challenges facing world leaders going into Paris, whether it’s politics and money and innovation. What would you say—if you had to boil it down to the biggest challenge, what would you say—if you could wave and magic wand and solve that problem, what would it be?
LEVI: Between now and Paris?
HARDER: Yeah, in terms of the biggest hurdle that is confronting negotiators in Paris. If you could get rid of that hurdle—if we were living in a magic world—what would it be?
LEVI: Transparency. I think that’s the biggest stumbling block, still, to an agreement.
SIVARAM: I actually agree with him, but number two is finance.
HARDER: Good, because you can’t have the same answer.
SIVARAM: I know. (Laughter.) We need to figure out how to—how to finance the developing world’s ambition to really pitch in on climate change.
HARDER: Great. Well, I would love to thank you guys for being up here, and I would like to invite you all to our networking reception out in the foyer. (Applause.)