Ambassador April H. Foley

Speech on Climate Change to NATO’s Advanced Research Workshop on Energy and Environmental Challenges to Security

Hungarian Parliament, Budapest
November 23, 2007

Good morning.  It is a great pleasure to be here to talk about a subject close to my heart, climate change.

Our discussion of climate change is perfectly timed with the Bali Conference just over a week away.

My topic is "Kyoto and Beyond:  Can Europe and the United States Find Common Ground on Meeting the Challenge?"  The unequivocal answer is yes.  In fact, absolutely yes.  While the press often focuses on perceived differences, an honest analysis shows the U.S. and Europe are quite close in their thinking.

First, I'll discuss the problem of climate change in broad terms.
 
Second, I hope to persuade you that the U.S. is just as concerned about climate change as Hungary and others in Europe.
 
Third, I will emphasize that the best long-term way to reduce greenhouse gases is both to regulate emissions and to deploy new clean technologies.
 
Fourth, I will underline that U.S. efforts are aimed squarely at making the UN's Bali process a success.

Let me begin with an unpleasant truth.  The United States is a world leader in total greenhouse gas emissions.  And why is this so?  Simply stated, America has the world's largest economy.  Although the U.S. has only 5 percent of the world's population, it accounts for 25 percent of global economic output.  Our substantial GDP is reflected in higher levels of personal income, bigger houses, more travel, more cars, and so on.
 
It would be easy to say "well, stop consuming so much."  And there is no question that conservation needs to be promoted.  But Americans aren't any different from anyone else.  They too want to enjoy the fruits of their labors. 

Other contributions to the problem?  Importantly, the population of the world is growing.  Even though China's GDP is only one-sixth the size of the United States, China is about to become the world's number one greenhouse gas emitter.  We all applaud China's rapid economic growth.  Its rising living standards are critical for the welfare of its people.  But China's highlights the magnitude of the environmental challenges we face.

The problem is how to reduce greenhouse gas emissions worldwide, while populations grow, while economies develop and while personal incomes rise.  The answer is not simple. 

Broadly speaking, there are three ways:

1. Improve energy efficiency
2. Increase the proportion of non-greenhouse gas emitting energy sources - so called alternative energy options; and
3. Learn to recapture and sequester greenhouse gases.

So how much potential does each of these offer?

Efficiency is probably the most appealing because it appears to come at no cost, but this is only partly true.  With some modest changes in behavior, certain efficiencies can and should be gained.  But achieving larger systemic efficiencies requires investment.  In Hungary, for example, many people live in older apartments where people regulate temperature by opening windows to let the hot air out.  Residents no incentive to be energy efficient, since their bills are the same whether they conserve energy or not.  Without a metering system for individual apartments that provides financial benefits for conservation, efforts are likely to be quite limited.  The high upfront cost of new metering systems can be a significant barrier. 

Efficiency improvements also have theoretical limits.  Most experts agree that efficiency alone can only reduce the amount of greenhouse gas emissions by the projected amount of emissions growth over the next 10-15 years.  So, even if we were to capture all available efficiency improvements, we would still be at current emission levels in 2017.

To really reduce overall emissions we have to look to alternative energy and recapture or sequestration technologies.  Alternative energy currently accounts for 20 percent of worldwide energy - up from only 15 percent in 1971.  Most of the increase is the result of increased nuclear power.  And by the way, the key to understanding France's low per capita greenhouse gas emissions is its high usage of nuclear power. 
 
Recapture and sequestration, including clean coal and reforestation, offer great potential for the future.  To that end, President Bush has moved forward with $1.6 billion in tax credits to help build nine advanced coal projects using technology that cuts emissions through efficiency and holds the promise of cost-effective carbon capture and storage.  

Let's be clear.  There are no easy solutions.  The problem isn't going to be solved just by people turning down their thermostats and buying a hybrid car.  That would help - no doubt about it - but even if everyone in the world traded in their cars for hybrids, greenhouse gas emissions would drop by less than 10 percent.

The solutions to the problem will come through multiple breakthroughs in technology.  Fuel cells, other non-fossil fuels, rapid reforestation and brand new technologies are key.

Let me address for a moment how Americans and the U.S. Government see the climate change challenge, because I think U.S. attitudes are often misunderstood.

The United States has a long tradition of environmental activism.  If you've traveled to the U.S., you probably visited one of our National Parks, which is part of a massive park system created more than a century ago.  There are literally thousands of public and private programs that protect our land, waterways, and coastlines and preserve immense land banks. 

The United States was at the forefront of the earliest efforts to clean-up rivers and lakes and reduce air pollution from cars and industry.  The establishment of the U.S. Environmental Protection Agency (EPA) and the adoption of the federal Clean Air Act in 1970 led the world, as did specific actions like the phase-out of lead in gasoline in the early 1980s.  Many of the regulatory and technological solutions employed around the world originated in the United States.  These solutions often came only after long and spirited public debate.  Climate change challenge is proceeding along a similar path.

In the last few years, a political consensus has been building on climate change.  As that consensus has grown, President Bush has proposed increasingly ambitious programs, including regulatory mandates, tax incentives, and education campaigns. 

The Energy Policy Act of 2005 established new tax rules and loan guarantee programs to encourage investment in energy efficiency and clean energy technologies. 

In his State of the Union Address in January, President Bush proposed the "20 in 10" initiative, a very ambitious program to achieve a 20 percent reduction in fossil fuel consumption from automobiles in 10 years.  This single initiative would achieve greater results than the EU's 10 percent biofuels initiative. 

Likewise, the U.S. is leading the way in second generation cellulosic ethanol research. The first new technology plant is likely to begin running next year. 

Since 2001, the U.S. Government has spent $37 billion on climate-related science, data assessment, technology, international assistance, and incentives.

An area that often gets ignored is the very significant role of the U.S. private sector.  There's an old saying, if you want to know where the action is, follow the money.  When it comes to solutions to the 21st century challenge of climate change, look where the big investors are putting their cash.  More and more, the hard cash investors - the ones who are in it, not because they have a sense of mission, but to make a profit, are putting their money in clean technology.
 
As a result of all these public and private efforts, the United States is expected to avoid emitting more than 2.2 billion metric tons of carbon dioxide equivalents from 2002 to 2012.  This is the equivalent to taking all U.S. passenger vehicles off the road for more than one year.  As history has repeatedly shown, once a broad consensus emerges on an issue, the U.S. is very good at developing and implementing innovative solutions quickly.
 
Let me slay one common myth:  Kyoto.  The U.S. decision not to join Kyoto was widely interpreted as a lack of interest in addressing climate change.  This simply is not true.  The United States has always been a leader on international environmental initiatives.  The Montreal Protocol - described by Kofi Annan as the most important and successful international environmental treaty in history - was negotiated and signed during the Reagan Presidency.  It not only eliminated ozone-depleting chemicals but has already produced 10 times as much greenhouse gas reductions as the first phase of Kyoto.

As for Kyoto itself, it was the culmination of a U.S.-initiated but, in the end, mostly EU-designed.  The hope was to draw-in all large economies.  But it did not.  The U.S. felt that Kyoto restrictions would merely result in manufacturing and jobs being shifted from the U.S. to countries like India and China, with no net reduction in global greenhouse gas emissions.  The U.S. decision was based on real concerns about whether Kyoto would produce the intended results.  It was not that the U.S. doesn't care about climate change.

So how are we doing?

Probably much better than many people think.  During the most recent reporting period, 2000-2005, the U.S. did a better job on some measures at controlling greenhouse gas emissions than the EU.  According to UNFCCC data, U.S. greenhouse emissions went up by less than 1.6 percent.  Yet, at the same time, our economy grew by 12 percent - or about $2 trillion.  Our population increased by 15 million people, more than one-and-a-half times the population of Hungary.  According to the same UNFCCC data, during the same period, 2000-2005, EU-27 emissions increased 1.5 percent, almost the same as the U.S., although Europe experienced a slower rate of economic and population growth.

Another way to measure climate change performance is greenhouse gas intensity, which is the amount of greenhouse gas emissions per unit of GDP.  While the U.S. economy has soared, our emissions have risen only slightly.  As a result during 2000-2005, U.S. greenhouse gas intensity decreased 8.5 percent.  In Europe, the trend is also headed in the right direction.  But progress is less dramatic, with greenhouse gas intensity falling 4.5 percent for the 2000-2004 period. 

In both the U.S. and Europe, CO2 emissions are starting to influence what cars people buy.  The carbon footprint of this or that activity is being taken into account.  And the role of nuclear power is being reconsidered, given its great potential for reducing greenhouse gas emissions.

There has also been a lot of progress in developing a range of multilateral initiatives, including:

• the Methane to Markets Partnership,
• the Asia Pacific Partnership on Clean Development and Climate,
• the Global Nuclear Energy Partnership
• and the brand new International Clean Technology Fund - all started by the Bush Administration. 
• And, of course, there is the process begun earlier this fall in Washington with the Major Economies Meeting - a process we hope will strengthen efforts to reach UN agreement in Bali.  All of this reflects the strong commitment of U.S. to the environment. 

Climate change is a serious challenge, but we have had challenges in the past that seemed as insurmountable in their day.  They were solved once public awareness was raised, a political consensus developed, and governments and the private sector began working together to address the problem.  We are headed in the right direction.  The EU and the U.S. understand the importance of bringing China, India, and all fast-growing, developing countries into a global agreement.

To that end, the United States looks forward to working with our European partners and others when the UNFCCC Conference of the Parties convenes in Bali on December 3.  We hope and expect that our deliberations there will result in a roadmap that will produce a post-2012 framework by 2009.  This "Bali Roadmap" should, in our view, reflect several key ideas:

One:  Comprehensiveness.  A future approach will be most environmentally effective if it includes all the world's major economies.  Similarly, it will not be economically effective if it undermines countries' efforts to develop and achieve higher standards of living for their citizens.  We have a common responsibility to address climate change, and we will all need to make appropriate contributions to achieve our common goals. 

Two:  Respect for diverse circumstances and efforts.  Our domestic characteristics vary and a future climate framework should respect these differences.  We should welcome a diversity of national plans, not a "one size fits all" approach.

Three:  Accelerating the uptake of clean technologies.  Advanced, low-carbon technologies are key to reducing emissions while economies grow. We need to increase support for new transformational technologies.  And we need to speed the adoption of proven clean technologies.

Four:  Sustainable forestry and land use.  How we use our land and manage our forests have a major impact on net greenhouse gas emissions.  Promoting sustainable forest management and smart land use are good for our economies and good for the natural environment.

Five:  Investment.  We need financing tools that support the development and adoption of new technologies.  President Bush has proposed a new fund to promote international investment in clean energy technologies.

Let me conclude by underscoring the point I made at the outset.  The United States is committed to working multilaterally to bring all major economies into a post-2012 energy security and climate framework.  We must move toward specific, concerted, truly global efforts to fundamentally alter the way our economies work.  In this way, we will support our shared dual goals of improving human development and reducing human impact on the climate.