A Conversation With U.S. Environmental Protection Agency Administrator Gina McCarthy

A Conversation With U.S. Environmental Protection Agency Administrator Gina McCarthy

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Energy and Climate Policy

Administrator McCarthy discusses the U.S. Environmental Protection Agency’s efforts to work with other nations to craft international climate policy and improve global environmental sustainability.

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GOODMAN:  OK, good morning.  It's a lively crowd for early in the morning here.  And I know you all join me in welcoming Gina McCarthy, the administrator of EPA to the Council on Foreign Relations.  And for those of you, like me, who have toiled in the trenches at the nexus of environment and foreign policy or national security for many years, I know we're all very pleased to welcome a great environmental leader here to the Council on Foreign Relations. 

Administrator McCarthy has served at EPA since 2009, and as the administrator for several years now, she comes to this position with a great depth of experience, and state leadership.  She has served for five governors, I believe, four of whom were Republican, including Mitt Romney.  And though she has quite a - a portfolio that can be quite contentious on Capitol Hill, she's widely respected by friend and foe, a tribute to her diplomatic skills.  What you really need to know about Gina, however, is that she is a member of the Red Sox nation.

(APPLAUSE)

And that she got the - she had the lifetime opportunity to throw out the first pitch at Fenway, I believe, a few years ago, and so that's something that many of us who count ourselves among the fans of the Red Sox nation hope to aspire to one day.  And - and also that she loves her job, and I think believe was quoted as saying, right now you  feel like you're 25.  But I won't say instead of what.

(LAUGHTER)

So, with that, we are very pleased to welcome Administrator McCarthy to the Council on Foreign Relations.

(APPLAUSE)

MCCARTHY:  Thank you, Sherri.  And thank you for the introduction, and all of the work that you have been doing.  It's been quite wonderful.  First of all, I want to let you all know that when someone says Red Sox, if you want to get time with - with Secretary Kerry, you should clap ...

(LAUGHTER)

... because he'd be interested in who was clapping, and who was silent. 

(LAUGHTER)

I know he's been a long-term fan as well.  But it is great to be here, but - but let me start by somewhat lowering expectations.  I'm on the - I'm sitting here, in front of the Council on Foreign Relations and I am simply not a foreign policy expert.  In fact, I've devoted my entire career to domestic policy.  But the good news is, that there is a tremendous intersect between the two, because where environment is concerned it's hard to know where domestic policy ends and where foreign policy actually begins. 

At EPA the challenges we face they are blind to borders.  Pollution and environmental degradation, no matter where you find them, strain people's relationships with the core elements that sustain life. That's clean air, clean water and safe, healthy, productive land.  And these elements really are the foundation on which all of our relationships are built, between individuals, between societies, and between nations.  So, I guess I can offer a - a few interesting comments for you today. 

So, let's start first by - by imagining an environmental crisis that is just so large it can only be captured by a satellite picture.  And a crisis that's so compelling that world leaders heed the advice of world renowned scientists and sign a global treaty to protect all people in all nations.  You don't have to imagine too hard, because I'm - I'm really not talking about climate change here.  I'm talking about the decades old battle to heal the ozone layer.  Do you remember that? 

I'm talking about the Montreal Protocol, which - which Kofi Annan called the most successful international agreement of any kind.  Decades ago, chemicals in everyday products were destroying the ozone layer, and that's the Earth's shield that protects against the sun's cancer causing radiation.  And it was a challenge that plainly showed that our environment does not exist separately from our actions and our ambitions.  That humanity's common denominator demands a common concern for well-being in a common understanding of shared responsibility. 

That's why I firmly believe that any conversation about relationships between nations has to include relationships with the environment.  And in that conversation, the most complex, the most urgent, and the sweeping challenge that we face today is global climate change.  The message I want to deliver to - this morning is - is really twofold. 

First, climate change fuels instability around the world by amplifying risks to global health, security and to growth.  We have to fight climate change by building it in to all of our existing international efforts.  That's what we mean by sustainable development.  Approaching climate change in isolation narrows our ability to turn a global challenge into a global opportunity.  By looking at it in this broader context, we open up opportunities. 

Second, history proves that U.S. leadership can unleash global progress.  Attitudes in America are changing.  People accept the science, and they are demanding action.  And EPA plays a vital role in the U.S. climate leadership and we are going to be delivering on the promises in the president's climate action plan. 

So, first let me spend a little bit of time talking about instability.  On the global - on the global stage, the story of resource constraints, and human conflict may have different characters, but the plot doesn't change.  Strained resources fuel instability.  That's been true for as long as people have occupied space on this planet.  And we've seen the age old drama play out today.  Take water scarcity in Darfur, for example.  From farming to tourism to infrastructure and global health, climate risk increases resource risk, and that means instability. 

Don't take my word for it.  The Pentagon calls climate change a threat multiplier.  President Obama's National Security Strategy recognizes climate change as the gateway to more natural disasters, refugee flows, and conflicts.  About a year ago, I spent a little time in Vietnam, with government officials, and all they talked about to me was their serious concern about what is going to happen in the Mekong river delta, where scientists say that by 2050, rising seas in the regions could force seven million people from their homes. 

And to put that in perspective, the Syrian conflict has forced three million refugees to neighboring countries.  Coincidentally, a report published by the National Academy of Sciences links the instability behind the Syrian conflict to a drought worsened by climate change.  So, I think you are getting the picture. 

So, it's no surprise that according to the American Security Project, 70 percent of the world's countries explicitly call climate change a national security concern.  As temperatures and tensions rise, so do insurance premiums, food prices, and the cost of doing business.  What doesn't rise are tourist visits, investment dollars, job growth, and the opportunity to fight poverty.  In short, the second biggest global risk of climate change comes to the fore in the - in the shape of economic instability. 

Climate change injects volatility into the global marketplace.  Volatility leads to instability, especially in economies that depend on agricultural commodities.  Take coffee.  Now, coffee's a temperature sensitive crop.  Climate change puts the world's coffee growing regions at risk.  Blue chip, global companies, like Nike and Coke, see climate impacts disrupting supplies of water, cotton and sugar.  And what happens when scarcer inputs are available?  That means that increased costs are passed to consumers. 

The SP has already warned that climate risk strains global credit.  So, put another way, growth depends on a safe environment and a stable climate.  We can no longer accept the false premise that pollution is somehow part of the growing pains of growth.  If that's your premise, then the foundation of that growth was not built to last.  It was wrongly designed, because treating the environment as window dressing, when it is an essential part of the brick and mortar of our lives and our economies is not a strategy for the future. 

The good news is, there are existing technologies and low cost strategies that can leapfrog all old ways of industrialization and move us towards a low carbon, sustainable future.  Now, that's the second point I want to make.  Climate action isn't just a moral responsibility we must accept.  It's an economic opportunity that we can seize.  To sharpen our global competitive edge.  To strengthen international ties and to catalyze global action. 

So, just take a look at what - what I call EPA's air monitor diplomacy.  A few years ago, we put air monitors on the roof of the U.S. Embassy in Beijing, and we posted the air quality data online.  Now, we did that so that American diplomats could know when the air pollution, the particulate matter, reached dangerous levels, so they could protect themselves and make decisions that would protect their families. 

Well, the air monitor worked, and then some.  It actually ended up informing the Chinese public about the pollution risks they were facing.  And it gave the Chinese government an opportunity to respond by more effectively capturing data themselves, and developing strategies to cut pollution in ways that align with their economic goals, as well as their climate goal. 

Our embassy air monitor is what I believe to be a textbook example of soft diplomacy.  It shows when America extends the environmental olive branch, it can blossom into stronger international cooperation, like the historic joint announcement on climate change between the U.S. and China.  Thank you for the clap.  It was quiet, but it was there.

(LAUGHTER)

(APPLAUSE)

And it also shows clearly that no nation can afford to ignore public health risks.  That's why I joined Secretary Kerry just a few weeks ago to announce the expansion of our air monitoring program.  What works in China can work in other countries, too.  And from a development standpoint, climate action does not mean we have to cast aside our responsibility to confront poverty.  Just the opposite.  Climate change protects those most vulnerable and can lead to more inclusive economies. 

I recently met with Vatican officials, who are working with Pope Francis on a new encyclical on climate change.  Pope Francis, and many, many faith leaders across the world see climate change as a moral obligation, and they support actions that open up opportunities for clean energy, for jobs for the future for millions of the poor and disenfranchised who have been left behind.  On the development front, many nations, including the U.S., are pledging money to the Green Climate Fund, to protect low emission - to - sorry, promote low emission climate resilient development. 

And that's a really important undertaking, but I would like us to broaden our thinking even further.  Because we can't just rely on the GCF.  Climate needs to front and center at the G8.  President Obama and Secretary Kerry continue to make that point very clear.  And we need to use this wider lens.  Climate, energy, and economic progress lives in the linkages between pollution and global economies. 

So, we know the risks.  We know the opportunity.  We know our moral, civil, and international obligation to act.  So, what the heck are we doing about it?  Well, President Obama, back in June 2013, made a very courageous speech.  He announced a national climate action plan, to cut domestic carbon pollution, to build resilience to impacts we cannot avoid, and to lead the world in this national, and in this international climate fight. 

Over the last six years, U.S. missions have - U.S. emissions have declined by a larger magnitude than any other country.  The U.S. aims to cut carbon emissions by 26 to 28 percent of 2005 levels as soon as 2025.  EPA is playing a critical role in achieving that progress.  With unprecedented advice and consultation with states and the power sector, we are setting first ever standards to cut carbon pollution from power plants.  We call it our Clean Power Plan, and it will be delivered this summer.  A modern economy needs a modern energy system.  Our rule embraces that spirit.  It's not about end of pipe controls.  It's about driving investments in renewables and efficiency.  It's about advancing our ongoing clean energy revolution, which unleases (sic) - unleashes innovation and creates jobs. 

The global climate fight is a marathon relay race.  There's a lot of ground that we have to cover, and we need everyone to run.  EPA's actions get the U.S. sprinting out of the gate.  That's what climate leadership looks like.  That's what progress looks like.  That's what investment, innovation and reinventing a global economy looks like. 

Business leaders understand that investment in climate actions are investments in global economic competitiveness.  Banks like Citigroup are investing hundreds of billions of dollars in climate and clean energy financing.  Even - even energy companies are weaving climate costs into their operations, because CEOs see the value of action.  This is not window dressing.  They believe it.  They're investing in it. 

Shell Oil internationally prices carbon at $40 a ton.  The value of less polluting energy projects directly translate today into value for our health and our climate.  Successful economies invest in where the world is going.  They don't invest in where it's been.  And that's good for American companies, because the global demand for clean technology doubles as demand for American technology. 

So, when people questions our changes against climate change they must be forgetting where we've been, because when holes in the ozone layer threatened all nations, it took all nations to reverse the course towards safety.  But it was us, the United States of America, that paved that path to recovery, because it was an American university that uncovered the problem.  And it was American industry that innovated solutions.  It was American leadership that forged a global market for better, safer products, and American companies that sold those solutions across the world. 

With climate change the source of pollution may be different, even the scope of the challenge may be different, but the principle that compels us is exactly the same.  This time the stakes are higher, but once again, we will lead because that principle is that U.S. must embrace the future.  The U.S. has shown its ability to innovate and understand where it needs to lead, and we will lead.  Madeline Albright famously called America the indispensable nation.  Nowhere is that more true than our environmental leadership, in development in diplomacy, and protecting global health and promoting global growth.  In this century, when it comes to climate action, we are truly the indispensable nation.  Thank you very much. 

(APPLAUSE)

 

GOODMAN:  Well, that was a terrific testimonial to the power and importance of environmental diplomacy.  And now we're going to have some dialogue here, for about 15 minutes, and then we're going to open it up for Q&A to the audience.  So, Gina, you made a great statement about the importance of U.S. global leadership, particularly on the road to Paris, in December, 2015.  What do you think, ultimately, can and should be accomplished there?

MCCARTHY:  Well, I think we're looking forward to actually provide - continuing to provide leadership.  I know that - that Secretary Kerry worked hard on the China joint announcement.  I think it was a great signal.  I think we got some - progress moving forward in India, and I know that - that EPAs's going to be continuing to do work with India moving forward.  And I think the hope is that we'll continue to work with all of the larger countries that really need to come to the table with solutions in Paris.  And so we are hoping for a Paris agreement that is binding.  That - that provides us an opportunity to account for greenhouse gases in each nation.  That is able to address and - and commit to specific reductions in a timely way.  And that - and that we will be able to all understand is a big step forward. 

Do I think there's going to be a magic bullet in Paris?  I don't think there is a magic bullet.  But I think if we all challenge our countries to do as I think China and the U.S. did, which was to look at all of the tools available to them to address climate change, and not just consider climate change an environmental issue, a solely environmental issue.  And we use all the tools we have in international diplomacy to build and think about climate as we're looking at economic development, and sustainable development.  That will open up significant opportunities.  It will allow us to get an agreement.  We need a legally binding agreement. 

GOODMAN:  So, speaking of that agreement and the central role that the U.S.-China agreement plays in the lead up to those international negotiations, many who follow international negotiations approach it, particularly in the environmental area, with a concern for how do we actually know that each country is - is making progress?  So, how do you think about the verification and compliance dimensions of such an agreement?  And what, particularly when you think about the power of that air monitoring diplomacy, what are - what kind of tools and technology do you see coming to the fore, to help address the monitoring compliance dimension? 

MCCARTHY:  Yes.  We have - EPA has played a pretty central role.  We do the inventory for the U.S.

GOODMAN:  Yes.

MCCARTHY:  And we actually participate in evaluing (sic) - evaluating other countries' plans and their accounting processes.  So, we know quite a bit about how to do accounting processes, and ensure that they're done.  The great thing is that we've always done them bottom up, and there's also now new ways of doing them top down.  Because we're developing strategies that - that really are satellite images that allow you to calculate carbon emissions more directly. 

And there are always ways in which we have new technologies in the field, some of which we're using in the U.S. in - in some - some - out west to look at oil and gas methane emissions and others, which can be remotely looked at, which can be calculated effectively.  I think the challenge is to understand what's - what's an amenable process moving forward in the international context that - that countries can - can embrace.  But we're continually doing better at identifying ways of both calculating the emissions in total, and tracking whether or not those emissions are going up and down.  But the science is continually evolving.  It is a - it is a - a challenging field.  I think technology developers that are looking at opportunities, this is a great place for it ...

GOODMAN:  Yes.

MCCARTHY:  ... in terms of monitoring - remote monitoring efforts.  But it - but it doesn't stop there.  We are, you know, it's very difficult in some ways to - to measure carbon emissions directly.  And I think we need to capture the full range of - of greenhouse gas emissions if we ever hope to understand what that target needs to be, both in 2050 and beyond.

GOODMAN:  So, measuring, monitoring and verification are commercial opportunities on the horizon?

MCCARTHY:  Oh, very much so.  I would - I would say that EPA is - is seeing that not just in the climate field, but in all of our fields, the - the work that - that we do.  We have a -- a great program where we're looking at what are these really great technologies that - that can engage citizen science, because I think what we saw in China was when people have information, and they begin to understand the context of that, they want action.  That - that they will do what we do here, which is the people speak to the leadership and they are able to - to make progress moving forward. 

So, we see amazing technologies now.  Hand held devices.  You know, when - when I walk down the streets in - in Beijing, you see people accessing their air quality data online.  This - this is not going to - going to be hard.  It's going to be an opportunity for these types of new technologies.  And - and EPA has some, so check our apps.  They're really kind of cool. 

GOODMAN:  Right.

MCCARTHY:  Check out the local quality of your streams, those kinds of things. 

GOODMAN:  So, speaking of the power of the air monitoring diplomacy, which I think is brilliant, and I have personally been meetings with Chinese business leaders who have said this really changed how we think about it, because this really put us in a place where we wanted to step up to the plate, to address the business and health risks in China.  Do you see this type of monitoring public diplomacy applying in other areas - environmental areas?  Take it wildlife trafficking?  Or ocean monitoring for widespread marine pollution or even other areas?

MCCARTHY:  Very much so.  I - I think that, you know, I can't speak to wildlife trafficking, because it's not an issue that I've been engaged in, but we are using all kinds of new technologies and trying to think of them to basically to make sure that agreements we reach in our standards are - are applied - complied with when you're looking at import and export efforts. 

And on the, you know, on - other, broader issues, the technologies that you develop in one field are never just applicable to that field.  There are - there will be opportunities moving forward in the areas that you talked about, and I think we look forward to making sure that from EPA's perspective, we're just trying to send the right signals.  We're trying to do standards that matter.  And we're trying to implement them cognizant of new technologies, because there are technologies that can actually reduce emissions significantly that weren't available to us before. 

There are technologies, for example, in our Clean Power Plan.  We're not just looking at reducing emissions at the - at the utilities themselves, we're looking at how do you invest in renewables and energy efficiency to draw demand away from those utilities.  Or looking at - at fuel switching. 

So, there's ways in which you can look at this, and very non-traditional ways all of the issues that you're talking about that will drive new technologies to the fore, make them apparent and evident, and international discussions, so that people have options to rely on - on accounting strategies that don't necessarily have to be bottom up.  They can be bottom up with verification in the way that - that we can all be confident in, and access pretty readily. 

GOODMAN:  Well, speaking of those opportunities, one of the areas that's long been talked about as having great opportunity is energy efficiency, which often flies under the radar.  And I see that Senators Shaheen and Portman are again - introducing again today their energy efficiency bill.  Do you see that - and you talked about the power of energy efficiency, do you see that this any further hope for contributing to the goals that you've outlined?  And further hope of advancement? 

MCCARTHY:  I have to say that I'm a little bit of an energy efficiency nut.  I - I am so bullish on our ability to use energy efficiency as a way to be - be more efficient, which is always economically beneficial.  If you take a look at it, states have been working on energy efficiency programs for a long time.  There is a lot of low hanging fruit, never mind opportunities for new technologies that create the next low hanging fruit. 

I've never seen any - anything like it.  And the way we're trying to describe it to folks, is that we when we did our Clean Power Plan, we allowed all kinds of choices for states on how to address the standards that they wanted - that they would - that they need to meet in ways that are flexible for them.  Let it go with the direction you want to head, your energy world, and - and your - your business community.  Figure out where your niche is., as long as you get to the standard. 

But what we did was we calculated a scenario where if everybody relied heavily on energy efficiency what would happen.  And it's - it's pretty amazing.  Energy efficiency is always the lowest cost option.  And there are opportunities to get significant reductions in emissions, in carbon pollution, by looking at those energy efficient technologies.  And it's a world where it's constantly changing.  The minute you - you set your sights, you want to get down to this level of efficiency, there will be hundreds of companies thinking about how to get more.  I just met with Secretary Mavis, the secretary of the Navy.

GOODMAN:  Yes.

MCCARTHY:  This man is startling in terms of the numbers he has on - on how efficiency, and how a switch to - to biofuels ...

GOODMAN:  Yes.

MCCARTHY:  ... has changed the complexion of the fleet.  And the way in which we saves money, and the way in which DOD investments in technology are - are - are actually sparking the coolest kind of - of new technologies that have applicability well beyond the defense industry.  It's just providing an opportunity for them to be looked at as exciting, instead of boring.  This isn't about old conservation efforts, and about wearing sweaters.

GOODMAN:  Right.

(LAUGHTER)

MCCARTHY:  You know?  And we - we just have to - to make that transition and see this as - as really as the future for - for jobs that are tremendous.

GOODMAN:  Well, speaking of DOD I'm personally very proud that the military today is seen as environmental and energy leader and not a laggard, and you use the phrase threat multiplier for instability in framing climate risks, which we coined in the CNA Military Advisory Board, back in 2007, and has become a sort of coin of the realm now in this particular field.  Do you see that this argument is having greater traction when you meet with audiences around the country, both business and other leaders, that the national security arguments ...

MCCARTHY:  Yes.

GOODMAN:  ... on climate risks are reaching more of the unconverted, for example?

MCCARTHY:  I - I think - every way in which you can address climate change that speaks to different audiences and - and is true to that audience, and true to the facts behind climate change, you will - you will raise - basically educate more people as well as get them engaged in the actions.  Because once you open your eyes, you realize that climate is - is - is not just an environmental issue, it is a fundamental economic issue.  Fundamental economic issue and - and national security challenge.  And - and I think the - the great thing for me about being in the Obama Administration and looking at - at working at - at the climate action plan is that the president has seen it that way.  He - he - I'm not sitting by myself.  You know, I've got Ernie Moniz, who's developing energy - you know, what do you call them?  The energy efficiency standards.  Minimum standards.

GOODMAN:  Yes.

MCCARTHY:  Thank you.  He's -he's going to moving like a dozen of those ...

GOODMAN:  Yes.

MCCARTHY:  ... over the next year and a half.  He's working for the same thing we are.  He's looking at - at developing and putting out his Quadrennial Energy Review ...

GOODMAN:  Right.

MCCARTHY:  ... that's coming out shortly, that's looking at the infrastructure that provides more opportunities for states to achieve the reductions that are necessary on carbon pollution under our Clean Power Plan in ways that are as flexible as they need.  You know, it's going to provide them open opportunities.  We have - I don't have to talk about the economy.  Jack Lew talks about the economy.  Nobody's going to want me to talk about whether - what the defense industry needs to worry about.  I get to quote the - the national strategy, but, you know, the national security strategy.  It is - it's an effort to make people understand that this is an issue from many perspectives, and the opportunity doesn't necessarily have to be by - by putting, you know, environmental pollution controls that people worry will cost money.  It is way different than that.  It is a fundamental way of relooking at where the United States is heading, and how to maintain our competitive edge by moving towards a low carbon future which everybody knows we need to do.  We should be there first.  That's what this is all about. 

GOODMAN:  Well, thank you.  Let's open it to questions now.  I see many hands.  And let's start with Bud McFarlane (ph) in the back.  Thank you.  If you can introduce yourself.  Although we all know you, Bud.

(LAUGHTER)

QUESTION:  Good morning.  Thanks very much for coming.  Among the leading sources of pollution, as you know far better than I, is so that everything that moves, in the air, sea, on land, runs on a petroleum based fuel.  And when we began to see whether there are alternatives, there are.  And when one looks alcohol fuels, electricity, someday fuel cells, there are other ways to power transportation.  I wanted to ask for your judgment about what EPA can do to enable and accelerate the introduction of alternatives?

MCCARTHY:  Yes.

QUESTION:  Such things as calling for higher level blends of alcohol fuels.  Enabling the retrofit of after-market automobiles to enable them to run on other fuels.  And possibly even looking at how automobile producers in our country could be incentivized in a way that doesn't cost any tax money, federal subsidies, and that is to say if you make at least half of your cars flex fuel, you'll get a little bit of a break on the 54 mile per gallon standard that is coming here in the next 10 years.  The chairman of Ford said that would make a huge difference in their willingness to go ahead and open up all of their production to be flex fuel.  So, I wonder if you'd comment on just those three measures.

MCCARTHY:  Sure.

QUESTION:  Incentivizing alcohol fuels ...

MCCARTHY:  Yes

QUESTION:  ... and then looking hard at the CAFE Standard incentive route for getting Ford, Chrysler and G.M. on board?  And enabling the retrofitting of old cars to run on all of these alternatives.  Thank you.

MCCARTHY:  I'm - I'm happy to do that.  There are, I think, many things going on, and let - let me just give you a thumbnail sketch of some of them.  One of the - the things that EPA is - has actually done in the - the current greenhouse gas fuel economy rule that we did with - with NTSA, is we actually did push the envelope on flex fuel vehicles.  We did give credit for the companies to actually look at how we could account for that beyond the point and time when CAFE no longer is - is pushing that issue. 

So, it is in there.  Whether it's in there in - as much as we could do, not if we had more ability to get more flex fuel vehicles into the existing fleet, or the - the new fleets.  I think it's an ongoing conversation with the car companies about how aggressive they can be.  It's also an ongoing opportunity for us to work with USDA and others to try to get more infrastructure for those fuels to be out there, and be available. 

It's sometimes a vicious circle when you talk to the car companies because they expect the infrastructure to be there before they produce the cars that can run on them.  And - and folks, who actually are in charge of the infrastructure, don't necessarily want the infrastructure to be there to accommodate that.  And so I think that's one of the reasons why Congress went ahead with the renewable fuel standard, was to continue to drive the renewable fuels to these higher blends, and, in fact, to advanced and drop in is where we need to be.  And I think folks - folks are aware of that.  And - and much of us are working on it. 

The challenge for EPA is if we can - if we can build more incentives into the system we should.  I know USDA is - is actually providing opportunities for at least E-15 infrastructure to be pushing forward.  We're looking at how much ethanol is being produced.  How much you can possibly produce.  We are looking for opportunities to make sure that when we move forward with our renewable fuel standards soon we are going to be looking at continuing to make that a dynamic push forward, not relying on the market to take care of this issue.  If it would, renewable future standard wouldn't be necessary. 

So, we're looking at - at all of these opportunities.  We're also looking at the retrofit issue.  We have made it, at least on the diesel side, a much less rigorous process to be able to do retrofitting of existing buses and trucks, to be able to make the switch.  And so we'll continue to look at those opportunities as barriers are - are raised to us, and we'll continue to move that forward.  It is a big opportunity, and, frankly, there is a -- a great shift in the market now towards cellulosic, and it's coming.  I know people have been saying that for a long time, but we're generating now not - not thousands of RINs, we're generating millions of RINs, and we have to be able to put - continue to push that forward. 

GOODMAN:  Claire (ph)?  Claire Casey (ph).

QUESTION:  Claire Casey (ph), Garten Rothkpf.  I was hoping you could comment on the potential impact of a sustained - sustained low oil price environment?  It's clearly globally it's provided some real breathing room for governments to start removing consumer subsidies, but in the U.S. does it offer some risk?  Could we potentially see consumer choice changing based on the low oil price environment?  Or changing the economics of CAFÉ compliance and efficiency technologies?

MCCARTHY:  Yes.  I think people have - have raised that question, and maybe - maybe I'm - maybe I'm more cynical than I need to be, but I'm not, you know, I - I don't think that - that anybody sees this as a long-term trend.  And - and so I do think that people are wondering whether or not people are going to change their choices, as a result of the low oil prices.  I think you will see some of that, and some of that in the short-term, but the short-term doesn't make a trend.  And one of the reasons why you do rule making, like our light duty vehicle rules and heavy duty vehicle rules, is not to allow the rollback. 

We are - we have set light duty vehicle standards in a way that will continue to be aggressive, and must be met, regardless of any shifts in consumer behavior.  It accommodates ways of handling that, but that means you're going to have continued investment and - and very fuel efficient vehicles.  We're doing the same thing with heavy duty vehicles.  Frankly, heavy duty vehicles is really interesting, because no matter what the cost of - of oil is, they don't want to pay any more than they have to because it's a - it's - they're not looking to buy the fanciest, coolest truck.  They're looking to buy the ones that run the cheapest, so they can - they can have a competitive advantage. 

So, we think for the mobile source sector that we've been very aggressive, and that regardless of - of the change in - in oil prices, you will be able to - to get the advantages that we're looking for with efficiency.  And - and I think in - in other areas, I should just also make the point on automobiles that the number one thing that people look at in automobiles, no matter what the oil price, is efficiency.  They love to - I don't know about you, but my husband will drive 250 miles to save a couple of pennies on - on - at the gasoline pump.  He's obsessed, as most men are.

(LAUGHTER)

And - and, so, I - I think we're covered there. 

(LAUGHTER)

GOODMAN:  OK.  Mitzi (ph)?

QUESTION:  I'm Mitzi Worthheim (ph) with Naval Postgraduate School.  This is a very exciting talk to hear, because I've been around a long time.  I remember when EPA was created.  I think feedback's incredibly important for everybody to understand, and I kept - I was sitting there, thinking, why don't we have something equivalent to our weather in terms of locally what's happening with the environment?  You just look it up, you know?  And the other question I have is do you have books that are written for children, and middle school kids, on all these environmental things?  Not only the work opportunities, but the scientific issues?  Because if the kids are talking about it, then the parents start looking ...

MCCARTHY:  Yes.

QUESTION:  ... at it.  And you - I haven't found any so, maybe I just haven't looked in the right place, but you might find some authors or publishing companies that would be willing to really work on this with you.

MCCARTHY:  We're - we're happy to do that.  We actually have an environmental education foundation that - that works with us to actually do the types of - of work that you're talking about it.  I think that it - it works pretty readily with things like recycling, which we're still not particularly good at, frankly.  So, there's a lot more than education that we need to do, but as we all know, but we are looking - one of the big initiatives at EPA is to look at these new technologies, and to get much more sophisticated at being able to let data become electronically brought into the age, and see which the business community loves.  Analyze and put up in a way that citizens can access the information.  Not just aggregated across the U.S., but accessed ...

QUESTION:  You can access it, but if you don't understand it, it doesn't do you any good.

MCCARTHY:  Right.  Right.  So, let me complete the sentence then.  I agree with you.  One of the things we're doing on climate, and one of the - is to basically provide what we're - what we're hoping to have the funding to do in Fiscal Year '16, is to provide circuit riders that go out to communities. 

The effort on resiliency brings home climate more than anything else.  You know, it allows people to understand two things.  One is that climate's impacts are real, they're happening today, they're happening in their community.  But it allows them to understand that there are action that can be taken that actually improve efficiency at the community level, that allow them - allow you to hire more teachers as a result of the savings to address what you thought was a horrible, indecipherable, you know, problem that no one could ever fix.  Do you know what I mean?  So, it gives a real life example that people can understand. 

And, to me, if you continue to do this work at the community level, it's the most important thing to do, because while recycling is easy to understand, it has become a horrendous task to - to get people to understand the difference between weather and climate, and acknowledge it and understand it.  And it - and it's become a tremendous challenge.  So, you're absolutely right.  More data, more real life examples that people can embrace.  Making environmental challenge personal is what we have to do.  Because while EPA's been around for - I remember, too - 44 years, I guess ...

(LAUGHTER)

... now, we have done a great job at - at - at basically reducing pollution, I think, in - in a way that other countries really envy.  And I - because this has been built into our system.  It - it's - we've enforced it.  We're regulated.  We have checked it.  We make sure that there's a level playing field.  But it doesn't mean that we can now back off, defund the agency, because it's been so built into the market, and consciousness of people, that it's going to stay just the same.  We simply know that that is absolutely not true, and there are areas in communities in this country have not benefitted from all of - all of the average reductions we have achieved.  They've been left behind. 

So, EPA's job is to consistently remind people that the environment needs to be dogged.  It needs to be watched.  You need boots on the ground.  And you need citizen engagement.  That's what got us to EPA being created 44 years ago.  That's what we have to keep in terms of our eye on the prize moving forward.  And we need these new technologies and we need citizens active on issues of - of all ilk at EPA.  But, clearly, most importantly on climate. 

GOODMAN:  One of your allies in that is your colleague, Kathy Sullivan, at NOAA, who has been pushing environmental intelligence which is the nexus between the climate and the weather date at the local and coastal level.  The gentleman at this center table, then two in the back.  Gentleman in the front, and then next.

QUESTION:  Thank you.  Harvey Gershman (ph), Gershman, Brickner and Bratton, solid waste management consultants, and also a proud member of the Red Sox nation. 

MCCARTHY:  Yes.

QUESTION:  The world is cluttered with a lot open dumps, emitting greenhouse gases, uncontrolled pollution.

MCCARTHY:  Yes.

QUESTION:  We've done a great job in this country, as a result of RCRA, and EPA's led the way with, you know, very strict regulations on converting our open dumps into compliance sanitary landfills.  What is EPA doing, thinking about, in terms of reaching out to these countries, to get them on a better road to solid waste management, and less environmental pollution from those open dumps?

MCCARTHY:  I actually have my assistant administrator in an international discussion on that now.  And I also want to acknowledge Jane Meshita (ph), who's sitting in the audience, who's the assistant administrator, at our office in International and Tribal Affairs.  Solid waste - let - let me address this in two ways.  One is we know that there's a whole bunch of different ways of looking at this.  You opened up a really big can of worms, but let me not get too excited about it. 

(LAUGHTER)

First of all - I know, isn't it awful to get so excited about solid waste?  Woo. 

(LAUGHTER)

Surely you wake up thinking about that every morning.  First of all, we are getting at methane from landfills by looking at landfills, not the ones that haven't been closed, but trying to get the landfill methane issue resolved.  And we are expanding - we are putting out a rule that's going to expand the standards required for landfills, so that we get at not just the private ones, but the public ones as well.  And I think we're trying to expand our understanding of the technologies that allow you to capture methane, and the design of landfills.  So, that as other countries are looking at that, we can share information moving forward.

The second, and one of the more exciting issues for me, and - and I understand that we have to get at all - all these landfills that haven't been quite owned up to at the state level, because the states are really the regulator of these - of these uncontrolled dumps, as you - you call them.  And we have to get at that issue. 

But one of the fun things we're doing is something called the Food Recovery Challenge.  I - I'm sure nobody's heard of it, because we haven't done it long enough, or invested in it enough, but we will.  We will use this - I think you've been reading about it in the paper, which is how much food we waste that ends up in landfills that ends up in our air as methane.  And - and it is - it is in the order of 30 to 40 percent of the food that is grown doesn't make its way into people.  It gets lost along the way.  It is wasted. 

So, we have a Food Recovery Challenge that is really fun, and that allows us, I think, to really challenge the - the idea that - that climate change isn't - isn't - isn't going to benefit the poor.  That it's going to be a burden because, as we know, all environmental improvements are burdens, right?  They're costs.  This is simply not true.  And the Food Recovery Challenge is a great way of showing that. 

We actually go out to retail stores, and we ask them, like grocery stores, to actually calculate what they're buying and what they're throwing away.  It is eye opening how much is - is - when they get a deal, they buy so much that no one could ever sell it. 

(LAUGHTER)

Right?  We - I do that, too.  Those end of the aisle things, I always buy more than I need.  And so they're asking basically retail outlets to look at this, and to make sound economic decisions as a result.  And to account for it.  And we're actually working with them to try to provide opportunities to bring recognition to those. 

We're looking at working with consumers to explain to them that go - go calculate what's in your refrigerator that's in that creepy container that you never got to eat, and how much are you throwing away?  How much are you buying?  And these issues are beginning to take off in a way that we're also working with the faith community that's really interested in - in feeding people, rather than throwing food away. 

And so we're working with how do we go - to the retail stores and instead - if you do have something that - that - that you have over purchased, or isn't selling, how do we work with food pantries?  But we're going beyond that.  We're working with culinary schools.  With kids that are community colleges.  And they're actually developing recipes for all the food that ends up in pantries, so that it isn't boring.  So that you can - not spam, I don't know how one makes spam more interesting ...

(LAUGHTER)

... but - but stuff that they can take and develop recipes so that the poor get to enjoy the quality food that we - that we enjoy.  And is there ways of closing the loop here that will address the food challenge we have, in a way that will reduce, in the end, the methane that is thrown in the landfills.  But also engage people in what they care about.  You know, feeding the poor matters to everybody.  None of us want to reject that moral responsibility.  But how to get at it in creative new ways is what we're trying to do.  Because I honestly think that environmental challenges can be easily nestled within things that people really care about, want to do, including how to grow the economy in a way that keeps people healthy.  That's what EPA is all about.  That's the solutions we bring to the table.  Not the burden that we add.

GOODMAN:  Woman at the back table.  And then the gentleman behind her. 

QUESTION:  Thanks so much.  Lucy Freedman (ph) from Climate Wire (ph).  Question, and then a quick clarification.

MCCARTHY:  What did you say?  Climate what?

QUESTION:  Climate Wire.  E&E (ph). 

MCCARTHY:  I though you said liar. I'm like ...

(LAUGHTER)  

QUESTION:  No.

MCCARTHY:  I'm sorry. 

QUESTION:  No.

MCCARTHY:  It's my accent.  It's in my ear, too.

(LAUGHTER)

QUESTION:  It's my accent.  I'm from Jersey. 

(LAUGHTER)

QUESTION:  Could you - could address, if you wouldn't mind, the - what seems to be a growing number of Republicans, Majority Leader McConnell, and now Senator Barasso, that are calling on their states to just say no to not comply with the power plant regulations.  Secondly, if you wouldn't mind, you - you said about Paris, we need a legally binding agreement ...

MCCARTHY:  Yes.  Yes. 

QUESTION:  ... in the reporting world that I live in, focused on the negotiations, that's often interpreted as calling for a treaty.  Can you clarify?  Are you calling for - for Paris to be a treaty?

MCCARTHY:  No, I - I try not to call for anything in the international context.  No, I - I wasn't, and that wasn't an implication.  Let me go - let me go back to the - your first issue, which is the Clean Power Plan.  I think most of you know that EPA has done - and I'm sorry if it seems like I'm too touting of EPA, but we've done an extraordinary job on outreach on the Clean Power Plan.  And we've done an unbelievable job to - to provide flexibility to the states with the implementation of this plan, and - and how to develop them.  I cannot tell you how engaging the level of discussion is - has been before the rule was even - we put pen to paper for the rule, after the rule, and up to today. 

There is no - there's no silence between us and states.  I see no effort that for states to - to be pulling away from the engagement, and it is incredibly robust.  And I think I - I am happy to leave it to the states, including the state of Kentucky, to speak to - to the folks on the Hill, who think that the best thing is for states to put their heads in the sand, and pretend like EPA isn't going to regulate.  EPA is going to regulate.  Midsummer is when the Clean Power Plan is going to be finalized. 

We will - we have every - every reason to believe that states engagement that we're - we're - we're engaged in now is going to be productive.  That we are going to have states continuing to work with us.  And EPA has every ability and will use it to - to implement a federal plan for states that don't choose to use their own flexibility to develop their own.  But, in any case, the standards are going to be real, they are going to be aggressive, but they're going to be achievable.  They are not going to threaten reliability. 

They are not going to significantly increase costs for the very reasons we have been talking about today.   Because smart climate action moves the economy forward.  Smart climate action grows jobs.  Smart climate action relies on - on a great mix of all types of energy.  All types will still be there in 2030, and we'll be able to rely on - on a transition to a carbon energy system, a low carbon energy system that is going to be continuing to move that trajectory, that downward trajectory forward.  So - so if folks are thinking any of these pieces aren't going to happen, and this isn't going to hold up, and this isn't going to be implemented, I think they need to look at the history of the Clean Air Act a little be more carefully.  That's not how we do business. 

GOODMAN:  OK, gentleman in the back.  And then we're going to bundle some of the last questions here, here and there.  OK.

QUESTION:  Jacob Harold (ph) with GuideStar, the largest database of information about non-profits.  So, I have a question about environmental non-profits.  So, there are more - there are tens of thousands of non-profit organizations that work on environmental issues.  They count for billions of dollars of activity.  Are you getting what you need from them?  The right pressure?  The right research?  The right support?  Do we have the - the social contract right, so that activity in the non-profit sector is supporting what you're doing in government?

MCCARTHY:  Well, I know the non-profit community is very active.  Sometimes we even get more than we need.

(LAUGHTER)

GOODMAN:  How could that be possible?

MCCARTHY:  It was a joke.

(LAUGHTER)

 

I think the non-profits are doing great.  I mean, they're - they're very active, and they're engaged, and clearly there's - there's an understanding out there, and it's a growing acknowledgment across the U.S. because polling shows this.  People are really worried, and they want action to happen.  And in a - in a democracy, you need everybody to really be speaking from - from, you know, families to - to local communities, to states, before the U.S. government usually is able to provide the leadership that that is needed.  And I think we're seeing that dynamic working very well. 

And we know that NGOs pay - play a critical role in - in organizing people, getting education out there, and I'm sure that they're working hard, and I - and I know that the - that the dynamics in the U.S. are changing.  And it's a result of everybody's efforts moving forward.  And we need to continue to push, because, you know, states know we mean business, but we also know we're really going to work with them. 

Our ability to actually move forward with this Clean Power Plan is really built on the efforts that states have - have done.  And it's built on the efforts that local communities began, and - and just like the first environmental movement, this movement towards low carbon economy is - is going to be driven the bottom up, and we are now listening. 

This president is listening to the years of work, and the years of push that - that local communities and states have been - been exerting so cleverly to develop new technologies, to think about the strategies that make the Clean Power Plan possible and achievable.  And it's been my pleasure, over my career, to have worked on those issues at the community and local level.  And it's pretty great to be able see us to be able to move that from - from the coasts and into the middle of the United States, because it is happening.  It is happening. 

You know, we've got renewable fuel standards all across the U.S.  We've got energy efficiency standards all across the U.S.  It's just making sure that they are clear, long-term signals that provide opportunities for investments to shift.  Real markets to be created.  Then it's built into the economic fabric of - of where we are, and where we're heading.  That's the goal.

GOODMAN:  Ok, unfortunately, I'm getting the signal we have time for only one more question, and I know this gentleman at the front table has been waiting.

QUESTION:  Thank you, thank you, administrator.  Sorry, I'm Bruno Fordoff (ph) from the French Embassy, so you will excuse my English.  Thank you, administrator, for a great speech, and the action actually of the - of the administration.  I also happily noted the legally binding tip (ph).  On the road to Paris, there are many, many factories, of course, many factories (ph) working on that.  And I'd like to concentrate on one issue that actually touched slightly.  Which is the involvement of local communities, and international (ph) implication.  So, in which way can EPA help or encourage local, and you talked about the state level - state level, city level, local authorities to be more energy efficient, less emitting, et cetera, communities?  Thank you very much.

MCCARTHY:  Yes, I think you're asking a - a great question.  And, first of all, you know, I'm going to leave it up to Secretary Kerry to decide what's a success out of the Paris talks.  But - but - but when you talk about engagement at the - at the local and state level, I think it's enormously important. 

You know, I think that's where the best decisions can get made.  you know, I always when - when - when I look at rule making at the federal level, you want the federal level to recognize that, you know, setting standards based on science it - requires a level of expertise that exists, usually, at the federal level.  But then when you want to figure out how to do it, let it happen at the lowest level possible, because that's when you're closest to the people, and you can translate these - these challenges into things that are meaningful for people.  And that - that take advantage of the economic synergies that - that always exist. 

So, for - in our international discussions, there's always been some of that.  Not enough.  Because we're - we've not recognized, in my opinion, all the work that's gone on at the local and state level as much as we should.  Because there has been an active and vibrant effort in the U.S. for many years to address climate.  And it might have, had it been recognized better, and incented better, it might have provided opportunities for us to move more quickly, which all of us would have liked. 

Now the Clean Power Plan was specifically designed to actually allow states to work at this lower level, to be able to understand how they could incent efficiencies in local communities in ways that mayors have already been stepping up and talking about.  We've got more than a thousand mayors, Republicans and Democrats, signing climate change pledges.  This is real stuff.  This is real, on the ground change. 

And what EPA did with this plan was to make sure that we didn't dictate the solution, but the solutions are solely in the hands of states, recognizing and - and we're hoping that they will have robust engagement of their communities, so that you can incent opportunities to get at that low hanging fruit and to build the systemic discussion in - in these - these states that allow them to go further where the economy shows it's best. 

Because I know we'll push them to strong standards, but I also know that when efficiency gets moving, nobody wants to be left out of that party.  They want more, and they want more.  And if you look at states like Massachusetts, my home state, that I'm very proud of, they continue to push for more efficiency, even though they have gotten past what most other states have ever contemplated in terms of being able to achieve.  And, guess what?  It's still there.  It's a gift that keeps on giving.  And so that's why I'm pretty confident that we can achieve the reductions we're looking for, and - and set us on the ultimate path we need.  And why I think Paris is going to be a successful, big next step moving forward.  And I think we need to embrace that as - as much as we can. 

GOODMAN:  Well, great.  Thank you very much, Administrator McCarthy.  I know there are many more hands up, and it's great to have all this enthusiasm.  I know that Secretary Kerry is speaking on climate diplomacy tomorrow in Washington, so there'll be other opportunities to continue this conversation.  And thank you all very much for joining us this morning.

(APPLAUSE)

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