Countdown to Copenhagen Symposium: Session 2: Connecting Domestic and International Action

Tuesday, November 10, 2009

This session was part of a CFR symposium, Countdown to Copenhagen: What's Next for Climate Change?, which was made possible through generous support from the Doris Duke Charitable Foundation, the Alcoa Foundation, and the Robina Foundation.

This session was part of a CFR symposium, Countdown to Copenhagen: What's Next for Climate Change?, which was made possible through generous support from the Doris Duke Charitable Foundation, the Alcoa Foundation, and the Robina Foundation.

WILLIAM L. ALLEN: Good morning. And welcome to this on-the-record Council on Foreign Relations meeting with Congressman Ed Markey of Massachusetts.

Please, those of us -- those of you who are just joining us, make sure that you turn off completely all of your cell phones and BlackBerrys, strawberries, blueberries -- (laughter) -- iPhones, whatever you have. Any of the electronic devices, please make sure that they're off, because they could interfere with the sound system. As a reminder again, this meeting is on the record.

We're delighted to have as our guest this morning a man who deals not only with the immediate concerns of governance but also focuses on the future and future generations. Chairman Markey, as we know, is one of the architects of the Waxman-Markey bill, which did pass the House in that landslide 219-212 vote. Congratulations, sir.


ALLEN: Now, that may have been close, sir, but you won an overwhelming victory in the acronym battle. The American Clean Energy and Security Act, ACES. Now, that certainly easily defeats CEJAPA, the Clean Energy Jobs and American Power Act, from Senators Boxer and Kerry. So congratulations again. (Laughter.)

MARKEY: Thank you.

ALLEN: Mr. Chairman, it's a pleasure to have you here just after your return from Copenhagen discussions. We're anxious to hear your perspectives on how to, in your words, create a future with more clean energy and less global warming pollution.

Mr. Chairman.

MARKEY: Thank you, Bill. (Applause.)

Thank you, Bill, so much. And thank you all for being here. And my good friend Richard Haass asked me to come here, and I am honored to do so.

I have been a member of Congress for 33 years. I'm now in my 34th. I've been on the Energy Committee and on the Natural Resources Committee for all 34 years. So that's 68 years of hearings on energy issues. (Laughter.) And Speaker Pelosi, when she took over as speaker in January of 2007, created a new Select Committee on Global Warming and Energy Independence and asked me to be the chair of that as well.

So that's now 71 years of hearings on energy issues. No one has ever tried this in the history of Congress before. And it has put me in a position of knowledge and experience, good and bad, going back to 1976, on each and every one of these issues.

In less than a month's time, the world will gather in Copenhagen for much-anticipated climate negotiations. But for America and the world, the real challenges to reaching an effective and equitable international climate agreement stretches back decades. As a country, we have taken longer than some to establish our stance on climate change. I think that part of the problem stems from the fact that past administrations saw it as an issue of foreign relations, kept separate from domestic energy policy.

As the Council's Mike Levi has thoughtfully pointed out, some administrations cast climate change largely in terms of international affairs. In retrospect, it is clear that from the global engagement of the 1990s: the 1992 Rio summit -- earth summit -- the United States' ratification of the United Nations Framework Convention on Climate Change later that year, and the Kyoto summit in 1997 did not drive the development of the domestic energy policies to sustain -- American domestic energy policies to sustain-- American engagement. Meanwhile, supporters of the fossil-fuel status quo who controlled Congress during that time battled any action on clean energy or climate change.

The last decade hasn't been much better. Even though George W. Bush campaigned on the platform that he was going to limit global- warming pollution, within a few months he rejected participation in the global response to climate change, choosing instead to focus on his high-carbon energy agenda that could not provide the United States with a credible platform for international engagement. He claimed that we were addicted to oil, but by -- but by not once, but twice begging Saudi sheikhs for oil, America continued to show herself willing to get the shakedown from any foreign oil source.

This was also the same period when, for six years in a row from 2007 -- when President Bush was sworn in in 2001 all the way to the point at which the Democrats took over the Congress in 2007, the head of the Environmental Protection Agency did not appear once before the Energy and Environment Committee in the House of Representatives. This was without question, that six-year period, the most successful witness protection program in the history of the United States. (Laughter.) No one even knew the name of the head of the Environmental Protection Agency. People who knew Bill's -- Ruckelshaus's name -- would be stumped in naming the person who ran the Environmental Protection Agency for the Bush administration.

How many people here know the name of the person who ran the Environmental Protection Agency for George Bush?

That's all you have to know about this issue, okay? That's all you have to know. I won't embarrass the rest of you.

The lessons here are clear. Having climate-change discussions on a different track than the formation of energy policy has not worked, because what is true in classic geometry is true in climate geopolitics. Two objects moving on parallel lines will never meet. To succeed, we need to have an integrated strategy wherein our domestic legislation supports and drives our international advocacy.

That is a lesson I learned in my work on telecommunications policy, which succeeded extremely well during the Clinton-Gore administration. I find that example is a helpful guide to constructing our energy and climate policy. I was the chairman of telecommunications in the Congress back in the 1990s, and there I was able to produce three pieces of legislation which helped to transform our relationship with telecommunications technologies. The first was the 1992 Cable Act that created the 18-inch satellite dish industry, which put more pressure, then, on the cable industry to innovate.

The 1993 spectrum act that triggered the digital transition to wireless -- that's what created the third, fourth, fifth and sixth cellphone license in America, and the price dropped from 10 cents a minute -- from 50 cents a minute to 10 cents a minute -- in just four years. As the four new companies went digital, the original two, who were analog, had to switch very rapidly from 1993 to 1996 to now compete in the marketplace.

And the capstone policy, the Telecommunications Act of 1996, which did pass the House overwhelmingly in 1994, which pushed businesses into Darwinian technological competition -- we were an analog world, not a digital world; we were a dial-up world, not a broadband world. Narrowbands was the way in which we operated in America. But this law was the capstone of those three policies, and we moved quickly into this new era.

Both developed and developing countries took copious notes from the American experience, and many used large parts of our American plan for information technologies to start or revise their own plans, and within 10 years cellphones outnumbered land lines in countries around the world. Now revolutions aren't televised; they're Twittered.

And in fact because of those three bills, you all have a device on your pocket right now. And many of you right now are looking at it instead of listening to me. (Laughter.) And so that is proof positive that my revolution was successful, okay?

And so we can actually do the same thing. Now there are a lot of technological pessimists out there who kind of view the world the same way the Bell industry did: that we can all still have black rotary dial phones with a cord about eight feet long, so that your mother can listen to all of your phone conversations, huh -- (soft laughter) -- and a hundred years later, that no further progress on Alexander Graham Bell's invention and insight is possible.

But unfortunately, we could -- Alexander Graham Bell could have recognized our phone system in the same way that Thomas Alva Edison today could still recognize our electricity grid. That's how little progress has been made over the last 60 years or so in the technological evolution. And there are many people who would love to keep it that way.

With American leadership, the world came together to adopt policies on Internet domain names, spectrum for satellites that enabled the global information infrastructure to be built and to be linked.

The world did not solve all of those problems. China still censored internet websites, and you can still buy a phone made by Finland at a store in Hell's Kitchen that won't work in Helsinki. But there's no question that the globe is a much better, interconnected place because core policies were adopted.

When it comes to climate and clean-energy policy, we need to have a similar, integrated approach in which domestic legislation enables the U.S. to be a strong international advocate. We recognized the clear and present opportunity we have to become the leaders and not the laggards on clean energy and climate change, because when the Chinese and Indians look up to the sky, they see red, white and blue CO2. Indeed, nearly 30 percent of all historical carbon emissions are American-made. That's why American legislation must enable global leadership.

And since the Democrats took back the Congress and President Obama entered the White House, we have made incredible strides towards low-carbon legitimacy. So in the same way there was a three-bill strategy to unlock that bottled-up technological capacity in the telecommunications sector in the 1990s, so too we have had a three- bill strategy to do the same thing in energy policy.

In 2007, after the Democrats took back Congress, we passed the first increase in fuel-economy standards in decades, and promoted the use in advanced renewable fuels. That increase from 25 to 35 miles per gallon -- my language, which is now the law, in that 2007 bill -- that backs out the equivalent of all the oil that we import from the Persian Gulf on a daily basis. Is that a small thing? I don't think so. That's energy policy. That's energy policy.

Believe it or not, it's the first increase since 1975. And the Republicans, once they took over Congress in 1995, actually added a rider to the transportation budget every single year prohibiting the Department of Transportation from even looking at increasing the fuel- economy standards in the vehicles that we drive. Is there any wonder why General Motors has a problem right now? Any wonder why Chrysler had problems? Any wonder why our increase in imported oil is up to 60 (percent) to 61 percent of all the oil that we consume in America? It's linked to where we put the oil, which goes into gasoline tanks. So we needed to have a strategy there.

Then, in January of 2009, in the recovery act, we invested $80 billion in clean-energy infrastructure and technologies, laying the foundation for an American clean-energy economy to flourish -- that's renewables, efficiency, new batteries. That's the funding that went in earlier this year to help to create this new environment where we can make progress in these areas where we have fallen far behind.

And third, the Congress is now working on legislation that will enact long-term policies to trigger huge investments in a low-carbon future. The House passed the Waxman-Markey American Clean Energy and Security Act this past June. Our colleagues in the Senate reported a very similar bill out of committee last Thursday. And Senator Max Baucus, a key figure in the debate as chair of the Finance Committee, said after the vote that he was confident that Congress would enact climate change and energy legislation during this term.

Leaders find it important for us to have an international agreement so that the policies that is -- that are contained in the legislation are part of the totality of the discussion which is going on globally. Within 24 hours of our bill being reported out of the Energy and Commerce Committee in May, Speaker Nancy Pelosi and I left for China for an eight-day trip focusing upon energy issues. I was amazed as President Hu, Premier Wen, and China's lead climate negotiator, and other Chinese officials spoke for an hour without notes on energy and knew the details of our bill, even as that in each meeting they were able to explain where China was going in these areas as well, a very impressive display of command of these issues at the highest level within China.

China may be pursuing an aggressive unilateral policy of investment in energy efficiency and domestic renewables, but in the international response to climate change, China is waiting and watching very closely for the American lead.

Last fall, Todd Stern, the U.S. special envoy for climate change, told me that the passage of Waxman-Markey in late June gave Obama the credibility he needed to work with the G-8 in July to agree to emissions-cutting and temperature-stabilizing goals. And last week, when Angela Merkel became the first German chancellor to address a joint session of Congress in 57 years, she focused her speech on climate change, praising the United States for our reengagement with international diplomacy, and reminding us of the urgency of a successful agreement in Copenhagen. Afterwards, chairman--Chancellor--Merkel, Henry Waxman, Speaker Pelosi and I met to discuss Waxman-Markey and the international measures in the bill.

In President Obama's first-ever address to the General Assembly of the United Nations on climate change, he said that Waxman-Markey was the most important step the United States had taken to reengage with the world on climate change. The president's speech underscores a fairly obvious but vitally important point. There can be no substantial international action on climate change without domestic legislation.

The centerpiece of our greenhouse gas reduction mechanism is a trading system that will provide opportunities for international investment. The only way -- and I mean the only way -- that you can generate significant sums for international assistance and investment is with this market-based system. You cannot accomplish that goal with a tax, nor, if the EPA moves forward, solely under existing authority. But while EPA action cannot provide the financing needed for international engagement on technology or for avoiding deforestation, it does drive an effective domestic agenda.

For those in industry and the Senate who are still in Wonderland and believe that they will succeed in blocking legislation, the Obama administration holds in its deck their Queen of Hearts: the EPA's authority to regulate emissions. Since the Supreme Court decision, Massachusetts versus EPA, in April of 2007, there has been granted back to the administration this ability to be able to regulate, so we don't actually have to pass legislation.

I urge the EPA to be ready to use that authority with the same urgency and severity as the threat that global warming presents to our planet and our country.

The Obama administration and climate and energy leaders like me can no longer capitulate to the denialists, the obstructionists and the agnostics on this issue. I believe that an aggressive EPA will push the last holdouts on clean energy and climate action further down that rabbit hole of their own unreality.

There will be two options, marked "the easy way" and "the hard way" -- flexible legislation, where we are trying to deal with the impacts of global warming and legislation in our own country, or direct regulation by the EPA. And the flexible and effective legislation that will drive both a domestic clean-energy agenda and international climate success is the Waxman-Markey bill.

Our bill uses international investments as a means to hold down costs for the American businesses that must reduce their own emissions. We allow for well-regulated offsets, where additional emissions reductions produced outside of the U.S. carbon cap can be purchased by entities looking to reduce their emissions. The value of these international offset purchases is estimated to be $10 to 20 billion a year. That's billions of dollars to help countries and businesses around the world avoid deforestation, plant new trees and otherwise become cleaner and greener, steps that they could not have otherwise afforded.

Our bill, Waxman-Markey, dedicates 65 billion (dollars) to protecting international forests while encouraging nations to create forest-protection plans. And over the first decade of Waxman-Markey, we dedicate $7 billion to international technology transfer while protecting the inventor's intellectual property rights, and $7 billion more to help countries like the Maldives adapt to the global-warming impact we already know are (sic) occurring.

And in order to ensure it protects jobs and consumers here in America, over half of the value that we have inside of the legislation goes to consumer protection.

Because of this, the economic modeling of the EPA and the CBO have found that our legislation will cost families less than a postage stamp a day -- a small price to pay for the economic benefits of a clean-energy revolution.

We have also instituted clear protections for our energy- intensive, trade-exposed industries, like steel, glass and paper, to ensure that our industries become more efficient. So are -- so are other major industrial nations. And we have a drop-dead date for these foreign competitors, 2020. By that year, they must clean up their own acts, or the president must act by instituting a border adjustment tariff that will put an additional carbon price on imported goods from countries that have not taken steps to control their heat- trapping emissions.

Now, I realize that there have been some gloomy forecasts for Copenhagen in December, and I'm not talking about the expected weather. But I have reasons for optimism. Just two weeks ago, in the same Danish city that will host negotiators from nearly 200 countries, I participated in an enlightening event that suggests the potential for climate-change success.

Given the importance of harmonizing domestic legislation with international agreements, I have been working with the Global Legislators Organisation for a Balanced Environment, or GLOBE, and this year served as the chair of their International Commission on Climate and Energy Security. That panel's work culminated two weeks ago in Copenhagen, when I joined China's Congressman Wang Guangtao, chairman of the People's Congress Environment Protection Committee in chairing the last GLOBE forum prior to the U.N. negotiators.

When a hundred legislators from all parties in the world's leading economies -- America, China, Brazil, India, the EU and others -- hammered out a set of principles that each of us will use when drafting domestic legislation, the agreement we reached that weekend, just two weeks ago, turned the conventional climate wisdom on its head and proved that there is cause for optimism on reaching an international climate deal.

It also showed the power of domestic policy. If the legislatures present at the meeting actually adopted the Markey-Wang principles on energy efficiency standards, forestry preservation and renewable energy, the result would be 70 percent of the emissions cuts required by 2020 in order to limit average temperature rise to no more than 3.6 degrees Fahrenheit.

More important than the details is the vital notion that legislators from China and the U.S., Brazil and Canada, and dozens of other countries, can agree on basic principles that will encourage the Copenhagen negotiators to seize the day and chart effective action to deploy the clean energy that will cut the heat-trapping emissions that threaten our planet.

But even as countries cooperate on reaching planetary environmental goals, let us not be naive. This is about competing for the profitable economic results of a clean-energy economy. China knows this, and they are moving swiftly to develop its economic markets for the export of clean technology.

Unfortunately, unlike the telecommunications and Internet revolution, America has fallen behind in the race to develop clean- energy technologies. Because of American leadership and vision, and the legislation which we passed that created Darwinian, paranoia- inducing domestic markets, we in a 10-year period changed our whole relationship with telecommunications technologies. The new language is "Google" and "Yahoo" and "Amazon" and "eBay" and "Hulu" and "YouTube" -- companies that didn't exist when we passed the Telecommunications Act of 1996. And it wasn't easy convincing the incumbents to move, but because we do -- we branded this industry internationally, because we got ahead of the curve with our own domestic legislation.

Right now, the EU is creating clean energy by the gigawatt, and cutting global-warming emissions by the gigaton. The Chinese are leading the world in solar energy manufacturing, representing 40 percent of the entire global marketplace.

In the race to gain clean energy supremacy, the Chinese, the Germans and countless other countries have already launched their clean energy Sputniks while the United States continues to waste time arguing with climate skeptics.

And make no mistake, I want America to win the clean energy race. Instead of the American economy importing millions of barrels of oil a day -- 13 million barrels of oil a day, hundreds of billions of dollars sent to OPEC and other countries around the world on a yearly basis -- we have to take "made by OPEC" and substitute "made in America" in terms of where our energy is generated. We run the risk of having the new technology say, "Made in China." That is, we will have been outside of both of these energy generation trends historically in our country.

And so we just have to decide: Are we going to create the incentives here in our own country to move forward? Or are we just going to wind up inevitably having it all imported from overseas 10 and 15 years from now? Because we all know this is going to happen. We are going to have this revolution. If the rest of the world moves, then we will wind up importing it anyway.

So the question for us is, do we export, or do we import? Do we create the jobs here, or are the jobs overseas, and we wind up importing?

When we did the telecommunications revolution, those three bills, it unleashed $850 billion worth of private sector investment -- $850 billion worth of private sector investment flooded into the telecom marketplace after those three bills passed.

The energy sector domestically is four times bigger than the telecom sector. This is going to be largely driven by the private sector. It will unleash trillions of dollars if we do it right. We just have to create this new marketplace that recognizes the science, deploys the technology, and is market-based, while we protect consumers during the transition period. That is our challenge, as a nation. If we don't take it, then we are going to be the big losers economically.

I want American workers to be the principal beneficiary.

The need to end dependence on OPEC while saving the environment is obvious to everyone in this room who's been a student of American foreign policy for the past 35 years.

Our historical and continued dependence on foreign oil distorts our military policy, skews our foreign policy, disrupts our economic policy and destroys our environmental policy. We only imported 20 percent of our oil in 1970. You would have thought that we would have learned this lesson now, through the first oil embargo, the second, the Iraq wars, Kuwait, all of it, as we go up to 60 percent. It distorts our foreign policy like no other issue.

And we put it into gasoline tanks. We put it into -- we put it into the importation of oil that could be substituted with an electricity internet grid. By the way, the Telecom Act of 1996 is what makes the smart grid possible, because all it is is broadband management of the development of energy technologies on deserts and prairies and on the ocean on people's roofs, but we can manage it now. One technology revolution begets the next. It's an electricity internet.

And if we do that in combination with plug-in hybrids, with all- electric vehicles, we can back that oil out. We can create the new products and we can export them around the planet.

In the very first hearing I held in my select committee, Richard Haass sat at the witness table because we wanted to focus on national security threats of oil dependence and climate change. That day, he said it is also a national failure, a bipartisan failure, that this country is consuming and importing as much oil as it is today, more than three decades after the first oil shock that accompanied the October 1973 Middle East conflict.

At the witness table that day was -- with Richard -- was General Gordon Sullivan, former chief of staff of the Army and a commander during the Somalia crisis. He explained how in Somalia, drought had led to famine, famine had led to clashes between warlords, these clashes led to American intervention, which led to the incident we know as Black Hawk Down.

The intelligence community told Congress last year in a report that climate change is a threat multiplier. If we do not act, climate catastrophe will continue. Climate change is predicted to exacerbate drought in Sub-Saharan Africa. The Intergovernmental Panel on Climate Change says that up to 250 more Africans could be without potable water from climate stresses within the decade.

And while water shortages will plague some parts of the world, shorelines will see a surfeit of sea water from rising oceans. Florida, Bangladesh, Egypt and low-lying nations will be reshaped as a consequence of an increasingly heated Earth.

When it comes to crafting an effective, lasting, international agreement to reduce global-warming pollution, we can accomplish that best by enacting legislation here in America that enables us to lead the global response to climate change. We must encourage the widespread, coordinated, well-funded development of clean-energy technology throughout the world. Our credibility depends on it, as does our position in the 21st-century geopolitical order.

Without American leadership, the world cannot fully address the most pressing challenge of our generation. Through domestic legislation, we must enable a swift and decisive response to this global problem.

Thank you so much. (Applause.)

ALLEN: Mr. Chairman, you mentioned -- thank you very much. You mentioned in your remarks the delay that we had in this country in dealing with the issue. And that's kind of put the U.S. behind the curve internationally, and we have a lot of ground to make up. There are giant steps that have been made in the last year -- in the last nine, 10 months -- to get the U.S. back in the game and to restore U.S. credibility when you're negotiating.

With no climate law signed, even though Waxman-Markey has passed, what kind of position does this put the U.S. negotiators in, in Copenhagen? Should we be optimistic about what can be done?

MARKEY: I am optimistic. I think that it was clear to the speaker and I and the Select Committee on Global Warming, when we visited China over the Memorial Day break for eight days, that the news that we were bringing them -- and the legislation, by the way, that they were already aware of, that had passed just several days before out of our committee -- had illuminated the Chinese that the -- that a game-changing, new era had opened up in America, and that we had to demonstrate the capacity and the resolve to pass that legislation, and that we were committed to seeing it through.

I think it was reflected, as a result, in the conversations that we were having with the Chinese leaders, as they each extemporaneously, without notes, for hours on end, were able to talk about their energy-intensity goals, their renewables goals, their building-efficiency goals. Each one of them was able to do it in detail that was very impressive.

And I think that we are going to see more progress as we head into Copenhagen. I'm very optimistic about the president's trip to speak to the Chinese leadership.

This is evolving very rapidly, and China has made a huge change in their view of these issues. They now see them as great economic opportunities. And we have to deal with that reality. But I think it will lay the foundation for progress in Copenhagen and beyond. That won't be the end of this discussion.

But I really do believe that the passage of Waxman-Markey, the passage out of the Environmental Committee in the Senate last week, Senator -- Senator Baucus indicating that he really does believe that climate and energy legislation will pass in this Congress, the conversations between John Kerry and Lindsey Graham and Joe Lieberman, all point in the direction of real progress being possible. And I think that Copenhagen will only build the momentum towards the United States successfully passing legislation.

ALLEN: Well, your trip to China and the ensuing negotiations and discussions with President Obama there speak to bilateral talks as well as the international -- as well as the larger groups.

You said after your visit to China that the negotiations on the issue would be one of the most complex diplomatic negotiations in the history of the world. I think that what we have heard in the last little bit here, you may have understated that. But I'm delighted to hear that you're optimistic about that.

We saw what happened in Barcelona with the G-77 and the discussions there on both the setting of the goals as well as the transfers of funds to help the developing countries. Do you see a way to bridge that gap that surfaced in Barcelona, for example?

MARKEY: Well, to a certain extent we bridged that gap in our legislation. I outlined the areas where there is funding provided for technology transfer, for adaptation, deforestation, mitigation, that will be used in developing countries. Ultimately, of course, there has to be a differentiation made between the least developing countries and the advanced developing countries. But that said, I think that the framework can be constructed that outlines long-term what kind of relationships can be established.

And I think that the very fact that we were able to pass this legislation from a dead start, after nothing having happened legislatively for a generation, going from January 20th just to June 26th in passing it, shows that we have telescoped a time frame to go through the political education, political activation, political implementation phases that historically have all had to have been fully developed.

And -- but here the Congress was able to act very rapidly. Now we did so with minimal support on a bipartisan basis, only eight Republican votes.

But that being said, I do believe there is an inexorability to us dealing with this reality, and I do believe that we will be able to create a framework that bridges the differences that were identified in Barcelona, because we're giving the -- we're giving the president the capacity, with the passage of this legislation, to begin those discussions in earnest.

ALLEN: Right. Going back to your trip to China for one second, 50 percent of our energy comes from -- electricity comes from coal; (this is) 80 percent in China. Is there common ground that the U.S. and the Chinese should be developing to help both countries?

MARKEY: If we don't solve the problem of coal, then we can't solve the problem of climate change. It's as simple as that. So even if we made a complete transition out of coal, we still would not have solved the problem because China and India and Russia and Australia and other countries in the world would continue to burn the coal at increasing levels because of their developing economies.

And so what we did in this legislation was to build in tens of billions of dollars for the research, development and deployment of carbon capture and sequestration technology here, and to create a dynamic by which we will ultimately be able to work in partnership with other countries around the world to have it deployed in the new coal-fired plants that are developed around the world.

Therein lies the basis, I think, for an agreement between the United States and China on carbon capture and sequestration research, development and deployment.

It's in our common interest. It goes right to the heart of the problem, since coal is the biggest part of the problem. And it deals realistically in the United States with the fact that we can't just say we're going to phase out all coal. That's not going to happen. It's still 50 percent of all of our electrical-generating capacity.

So it's better for us to realistically say we're going to do the work that finds a way of sequestering the carbon, and then, in partnership with other countries in the world, have it adopted in their coal-fired plants as well. And I think that will be a big part of the announcement which comes out of either the president's trip to China or in Copenhagen, that demonstrates that we can begin to work together on a global basis.

ALLEN: Okay, I do want to get to questions, but I just had one other thing that has really struck me as very interesting. You've seen the main points of contention in the debate in the -- in the Senate, and especially on the support for nuclear power and increased drilling.

MARKEY: Mm-hmm.

ALLEN: Do the discussions there offer any guidelines to you for developing something in conference, presuming that something will go to conference?

MARKEY: Mm-hmm. That's a very good question. The -- Waxman-Markey was endorsed by the Nuclear Energy Institute. They came out and endorsed our bill. Obviously, in a carbon-constrained world, nuclear power, a non-carbon-emitting source of energy, does well.

In addition, we build in an advanced clean-energy bank, $75 billion, which the nuclear industry can avail itself of for their new advanced nuclear technologies. We build that into the legislation as well.

We had every major nuclear utility in the United States endorse the legislation, from Duke Power to America -- AEP, Exelon; all endorsed the bill. Those are the major electricity -- nuclear electricity generators in the country. So I do believe that we can find further agreement when the Senate acts in conference committee with the House on this question of nuclear technology.

But just let me make this point as well, just so that people can get an idea as to what's going on out there. In 2008, there was 9,200 new megawatts of renewable electricity deployed in the United States, 8,400 megawatts of wind, 500 megawatts of solar, geothermal, et cetera down the line. So just to get an idea of the scale, Seabrook Nuclear Power Plant is 1,000 megawatts. So there were 9,200 new megawatts of renewables deployed last year.

And this year, it will be between 8,000 and 9,000 (megawatts) - a little bit lower because of the recession, but still very high.

So once Waxman-Markey passes, with its renewable electricity national mandate in it, and all of the incentives which we built into the legislation are finally deployed, we'll be look at perhaps an advance of 15,000 new megawatts per year. So we could wind up, in the United States, by 2020, with approximately 200(,000) to 250,000 megawatts of renewable electricity.

So when people say, well, it's only 1 percent today, that's like saying, well, there's only 1 percent computers today, 99 -- in the year 1980 -- 99 percent have typewriters, and Remington just opened a new plant, okay, for new typewriters, right? Well, check in 10 or 15 years later and do that equation again. That's how quickly this is going to be adopted. Color television sets, you name it.

So we will get that 20 -- we will get that 15 to 20 percent goal in -- by 2020. And -- and before -- and by the time you reach 2020, because it takes 10 years at least to build a nuclear power plant in the United States, that will be the first 1,000 megawatts of new nuclear energy that is added to our mix in 30 years. So we'll have added 200,000 renewables and that'll -- and we'll have one new -- 1,000 new from nuclear.

It will be in the mix. The incentives will be built into the legislation. It will have a much more level playing field in order to compete than it's ever had before. But you just have to understand, there is a new marketplace breaking out, and both China and the United States believe that we'll be generating electricity at four cents a kilowatt-hour from thin-film solar photovoltaics by the year 2016 to 2018, which is competitive with coal and with natural gas.

And so that race is on, and it -- and much like Google and eBay and Amazon and the broadband revolution, that is happening very, very rapidly. And so I just think that people should be optimistic that we can reach an agreement with the Senate; that we can look at nuclear, we can look at other energy-generating sources; produce something that passes; create a transition for all industries for the future; and give ourselves something that we can insert into an international agreement that basically reflects what we've agreed upon as a consensus in our own country is the pathway that we should be taking.

ALLEN: Very good.

Let's now open it up for questions here. Please wait for the microphone and speak directly into the microphone this way. I notice that it's better this way than this way. And please state your name and your affiliation. This lady here on the aisle.

QUESTIONER: Congressman, thanks a lot for your speech.

ALLEN: Can you speak up just a little bit?

QUESTIONER: Yes. I'm Sabine Muscat with the Financial Times Deutschland.

MS. : (Off mike) -- to speak up for questions. (Laughter.)

QUESTIONER: (Laughs.) Okay. I can also stand up, okay.

I'm Sabine Muscat with the Financial Times Deutschland in Washington. Thank you very much for your interesting speech.

Coming back to Copenhagen once more, I would like to ask you what is -- basically, what are your -- what is the point from which on you would call it a success? What are the elements for you that are indispensable that have to be agreed upon? Let's -- talking about deadlines, 2020, 2050, talking about the 3.6 Fahrenheit goal -- what are the goals that you want to see achieved in Copenhagen? And can you give us scenarios? What's your best-case, what's your worst-case scenario for an outcome in Copenhagen? Thank you.

MARKEY: Well, obviously, the G-8 agreed that there should be an 80 percent reduction by 2050, so we -- and in the out years, I think it's possible to reach an agreement in terms of those deadlines. But I think that, for us, it's important to understand that we have started very late -- very, very late.

If you remember, President Bush ran on this issue, said he was going to do something about it, CO2, and then basically took it all back six months in. And so that has created a difficult negotiating environment for us over the last eight years. So we've really only begun in earnest this year.

And so I think if a new framework is constructed, and we reach agreements on carbon capture and sequestration for example, you know, on creating a fund that will help with international adaptation and mitigation and deforestation and other issues that are of great concern to developing countries; that we can build on that in the relatively near future after Copenhagen, and ultimately put together a final solution that does -- that does deal with this problem.

So I'm -- I believe that there is a -- again, that there is a(n) inevitability to the world agreeing. All of the details won't be finalized in Copenhagen, but we're on that pathway now. And I think everyone should be very hopeful about what's about to happen. I think this meeting in China is going to produce a very good, positive result.

When I was in Copenhagen just two weeks ago, the chairman of the climate committee came over to me and in -- and in Korean said something in great earnestness to me. And in the middle of it, he said the words "Waxman-Markey." And so then, through the translator, he said, "I am the chairman of the climate committee in South Korea, and we are going to pass our Waxman-Markey before we go to Copenhagen." (Laughter.) The speaker of the South African parliament came to Copenhagen two weeks ago to announce to everyone there that they now are committed to moving forward legislatively as well. Even Chairman Wang, who is the chairman of the environment and energy committee in China, was making the same kind of statement.

So there is something out there that obviously needs to be captured. The framework that we construct I think will be a big part, then, of filling in the remaining details in the future. But I'm very optimistic.

ALLEN: Okay. This gentleman here. Further in the back. Right there. Yes.

QUESTIONER: Rick Gilmore, GIC Group.

I think you would agree that land-use considerations and calculations are critical to any successful regulatory regime. I wonder if you would comment on what you think the prospects are for the provisions in the Waxman-Markey bill being retained in any final legislation with respect to land use, and what the impact in your view is on agricultural production worldwide?

MARKEY: Thank you, sir.

It's always, you know, difficult to get inside the internal workings or the cerebral mechanisms of members of the United States Senate. (Laughter.)

So I will -- I will -- I will say this though, that we do believe it's a central part of our -- of our agenda. We are -- we constructed the offset programs as something that can help our ag (riculture) community. But we want them to be verifiable. We understand that the same thing is necessary internationally in order to change land-use practices and encourage no-till farming, for example, et cetera.

So it is central. We built our legislation in a way that deals with that reality. We're going to continue to press to accomplish that goal in any final piece of legislation. But at the end of the day, I think that there has to be a strong land-use-related set of provisions in the legislation if we are going to solve the problem. And we are committed to accomplishing that goal, Mr. Waxman and I and Speaker Pelosi.

Yes, sir.

QUESTIONER: Edwin Williamson from Solomon and Cromwell.

On the nuclear issue, the thing that's always puzzled me is that people seem to leave out of their calculations the question of the -- what do to with the spent fuel -- not only the cost of it, but just the logistics of it. Isn't that a bottleneck in the -- that needs to be cleared away?

MARKEY: Domestically?


MARKEY: Domestically, yes.

Even before Three Mile Island, from 1974 to 1979, there had been a radical cutback in the amount of nuclear power that was being ordered in the United States, and those plants that had been ordered were being canceled; about half of them had been canceled between ‘74 and ‘79, even before Three Mile Island. So there are real marketplace realities that were being created.

It is a very expensive way to boil water, without question. And it's complicated by the nuclear waste issue, where no permanent repository has yet been finally licensed. So next to each nuclear power plant, there is a storage facility. So we have about 120 of them in America, and next to each one of the nuclear power plants is a storage facility, which becomes the de facto permanent repository. So that becomes a limitation, obviously, politically, but not necessarily economically.

So I do believe, to be honest with you, that where there are existing nuclear power plants and there are abandoned sites, that as many of these facilities were going to have two plants or three plants, that it will be possible in many instances to construct additional nuclear power plants on those sites since the siting issues are amongst the most difficult, and there is already an existing storage facility there. So I think that it will be possible there, and that's most likely almost every extra believes it to be the -- to be the places in America where, if the industry is going to see a renaissance, it will see it where it has already been successful in the past -- the licensing, the siting, the construction process has already been completed before.

But we shouldn't expect there to be an early resolution of a permanent repository. I was the chairman back in -- I was the chairman of the energy subcommittee in 1985 and ‘86 as well; only about 34 years in Congress. So I know why Yucca Mountain got selected: it was because the Texas delegation didn't want it in their salt domes, the Louisiana delegation didn't want it in their salt domes, John Sununu did not want it in the -- the governor of the state of New Hampshire did not want it in their granite, the majority leader in the House did not want it at the Hanford nuclear reactor. And so slowly but surely, the nuclear queen of spades headed towards a state with one congressman, okay, Nevada. Okay? (Laughter.) So that was not the National Academy of Sciences. I was in the room, let me tell you, okay -- (laughter) -- objecting on behalf of the National Academy of Sciences in terms of the decision-making process, okay? But you can expect, you know, that when a river is nearby and -- you know, there were a lot of problems with Yucca Mountain that were overcome so that we could have a political resolution of the issue back in ‘87, but it doesn't mean that it solved the problem.

But all that notwithstanding, it is still likely that nuclear power plants are going to be constructed. They will be constructed here. But the cost -- the cost of constructing them I think is ultimately going to be the biggest problem. I think it will be less a nuclear waste problem than its ability to compete economically notwithstanding the other incentives which we will be building into legislation to help that industry.

There are two plants being built down in San Antonio which have already seen 3 (billion dollar) and $4 billion cost overruns in a relatively brief period of time.

ALLEN: Okay. We have time for just one more question.

QUESTIONER: Thank you very much for your presentation. My name is Sun Guoshun from the Chinese embassy in Washington, D.C.

I have a question. We appreciate your effort to come up with climate legislation in the Congress. I think that is appreciated by the international community and I also think send(s) a positive signal to international community that the U.S. is on track of addressing climate change.

And on the other hand, we still have some concerns to extent of reduction of the bill. You know, it based on the 2005 base year, which is the peak year with a total emission of 7.2 billion tons and 24 to 25 (tons) per capita emission in that year. So on the other hand, climate change science asks to a reduction of 25 to 40 percent to achieve the goal of bring down -- or to keeping the temperature increase within 2 degrees centigrade. And you know, according to your bill, it will reduce 3 percent on the 1990 level. So there is a gap there.

So, according to your understanding, you know, how to address that gap? Thank you.

MARKEY: Thank you, sir, very much.

So therein, in that one question, lies the problem, okay? The United States has hidden behind China for a generation, and China has hidden behind the United States for a generation, huh? Which is why this meeting between President Obama and President Hu is so important.

We just have to deal with the reality of where we are today. We without question should have been moving sooner in the United States. President Bush should have done a lot more. And if he had honored his campaign promise, we would be a lot further along. That did not happen. So we are in a situation that has us starting from a point that is much lower than we would like it to be in terms of us meeting our goals.

However -- and this is what we hope ultimately observant international commentators will reflect upon -- that we -- given how far behind we are historically, that this bill, the Waxman-Markey bill, is very aggressive. It changes the entire posture of the United States in a very brief period of time towards meeting very aggressive goals. We need to see a concomitant response from the Chinese government to deal with this incredible change which is happening in the United States. The rest of the world wants to see the United States and China working together as the leaders of the planet on this issue in Copenhagen.

That's the great challenge of the two countries that produce 40 percent of all greenhouse gases on a yearly basis. And without that, ultimately, an agreement that is truly meaningful will not be possible. So it puts a great deal of pressure upon these two great countries to be able to really get past the history and to move to a new way of dealing with these issues, both politically and rhetorically.

And that is my hope of what is about to emerge. I think the expectations are very high for our two countries. And there has to be, again, a stipulation made that we should have done better, we could have done better, but we did not. But we are now firmly committed to moving in a new direction.

And our hope would be that the Chinese government would recognize that, recognize the depth of sincerity of our country to become the world leader and not laggard -- which we have been unfortunately, which resulted in a terrible spectacle in Bali -- and I think that they realize it, most people. But they will want proof, and I think Waxman-Markey and counterpart legislation, which will pass the Senate, will demonstrate that. And if not that, aggressive action by the EPA will demonstrate it. The president has enough capacity to be able to make those points to Chinese leaders and other leaders in the world.

So yes, we recognize it, and -- but we want to be your partner, and we should be, and -- because ultimately we also recognize that 97 percent of increase in additional CO2 between now and 2050 will come from developing nations, okay? So we cannot, as a developed nation, solve the problem without partnering with the developing nations of the world. And that 97 percent number coming from developing nations is the central fact that we have to deal with as well.

So I thank you for your question, sir. I'm hoping that our -- the leaders of our two countries can be arm and arm in Beijing, you know, announcing the progress that we can make together to save the planet.

And I thank all of you for inviting me here today.

ALLEN: Thank you very much, Mr. Chairman.

MARKEY: Thank you. Thank you. (Applause.)

ALLEN: Thank you for your -- thank you for your questions as well. And it's 11:30 -- 11:30, next session.







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