Post-Kyoto Surprise: America's Quiet Efforts to Cut Greenhouse Gases Are Producing ResultsKurt Volker, Principal Deputy Assistant Secretary for European and Eurasian Affairs
Remarks at the German Marshall Fund
February 12, 2007
Hello, and thank you for those kind words. It is a pleasure to be here at the German Marshall Fund--in the year marking the 60th Anniversary of the Marshall Plan--and to meet all of you.
And it is a great time to be here in Germany. Germany is providing exceptional leadership to the European Union and the G8, bringing its considerable political, economic, security, and diplomatic resources to bear on some of the most pressing challenges of our time. And it is a time when our two countries are working together as allies and partners to deal with global challenges as never before.
I say "never before," when of course we worked together as the closest of Allies during the Cold War and the decade after. But those challenges were all centered on Europe. What is unique today is that the principal challenges our nations face are outside of Europe, and the United States and Germany are now working together on a global agenda.
I should add that our economic cooperation is in fine shape, that trade between our companies is booming, that our security cooperation is as strong as ever, and that people-to-people contacts are robust. Germany enjoys an excellent reputation in the United States and within the Administration.
This can all be called a very good thing, especially for someone like me, whose job is supposed to be to get things like I've just described to be true. Of course, I can't take credit for any of this, in reality. But it certainly looks good on my efficiency report.
It would be easy to talk about any of these things in our globalized relationship. And I have just come from the Munich Security Conference, which was a remarkable event this year, and it would be easy to talk about that as well. But what I'd really like to talk about is something else. Today, I want to speak today about an issue where we are frequently misunderstood, an issue that shapes a large part of public attitudes about the United States.
I am talking about climate change, what the United States is doing about it, and what we and the European Union, and indeed the world, can do about it together--because there is perhaps no other issue where we agree so much, yet understand each other so little.
Thomas Jefferson, in the very first paragraph of the Declaration of Independence, gave the advice that when a people decide to make up their own mind about something, "a decent respect to the opinions of mankind" requires that they explain themselves.
I am not one to differ with Jefferson. It is important that we explain ourselves, especially on so important an issue as climate change.
But it's not just me--this is being done top down. As all of you know, President Bush devoted a significant portion of his State of the Union address last month to the subject of climate change-and to what the U.S. intends to do about it. And our Ambassador to Germany, William Timken, has spoken out on this issue often, and is doing so again on February 21st at an event sponsored by the Atlantik Bruecke.
I'll come back to the President's specific proposals later. But let me start out with some clear, simple statements:
Just because we haven't joined the Kyoto Protocol doesn't make any of these statements less true.
Now, I know there is a deeply held view among many in Europe that the U.S. Government doesn't get it. That we don't care about climate change, that we are doing nothing to reduce greenhouse gas emissions, and that Europe, while perhaps not perfect, is doing a far better job of tackling the issue than the United States. This proposition--no matter how simple, no matter how widely held, and no matter how much it fits a pop-culture "blame-the-United States" paradigm--is completely wrong, on every point.
Today, I want to set out three broad points, hoping they will illustrate clearly the perspectives and the actions my country has taken on this important matter:
Let me start first with the data, because it is important to have the facts on the table. No question: The United States is the world's largest emitter of CO2. Everybody in the room knows this. But this fact says no more about the United States, than the fact that Germany leads Europe in emissions says about Germany.
The United States is number one in greenhouse gas emissions primarily because it is the number one economy in the world. With 5% of the world's population we produce 25% of global wealth. And despite being relatively clean and green, Germany leads Europe in emissions, because it is Europe's largest economy. Our emissions are not out of line with the size of our economy. And it's worth noting: the International Energy Agency is forecasting that China, with a smaller economy, is expected to surpass U.S. greenhouse gas emissions by 2009.
More important than current emissions is the trend line. What is actually happening to emissions? Are they being reduced? This, after all, is what Kyoto is supposed to address.
According to data from the UN Framework Convention on Climate Change, from 2000-2004--the most recent period for which we have good, comparative data--U.S. greenhouse gas emissions increased by 1.3 percent. This is an increase, but a very modest increase. The EU-25, on the other hand, increased collective emissions by 2.1 percent.
And, no, this is not because the new EU members added since the 2004 expansion run dirtier economies than the previous 15 members, and this then bumps up the numbers. Actually, the new members have the opposite effect. Those nations--by moving away from some older energy technologies like brown coal--are part of the good news story. If the new EU members did not bring down the average, the old EU-15 would get a worse report card--having increased emissions by 2.4 percent during this same time period.
Germany, I should state, had an admirable record of actually cutting greenhouse gas emissions by 0.7 percent during this time period--but Germany's efforts were overshadowed by increases in most other EU economies.
Now let's be honest--even a 2.4 percent increase for the EU-15 is a very modest increase. But given the way this issue gets talked about publicly in Europe, I would venture to say that few people in Europe know that from 2000 to 2004, EU-15 emissions grew at nearly double the U.S. rate, and that Europe, at least during this period, has been moving away from-not towards-its Kyoto target of an 8 percent cut.
Even so, the trend in both Europe and the United States is in the right direction-reducing the growth in emissions. The figure cited above--a 1.3 percent growth in U.S. emissions from 2000 to 2004--translates to 0.325 percent per year. Over the period 1990 to 2000, the United States experienced a 14.3 percent increase in its emissions, or 1.4 percent per year. So we have slowed considerably.
Now notice something else. This time period of 2000 to 2004 was a period of rapid economic growth in the United States. Between 2000 and 2004 we grew our economy by almost 1.9 trillion dollars (or nearly 1.46 trillion Euros). That's about the equivalent of adding Italy to the U.S. economy. And we increased our population by 11.3 million people--adding more than the population of Greece. And yet our emissions grew only 1.3 percent--that tells you a lot about how the U.S. economy is already changing to reduce greenhouse gas emissions.
It is of course very hard if not impossible to see an actual decrease in emissions when both your economy and population are growing, though we came close. So how do we get a better measure of what is really happening? We do that by measuring the greenhouse gas intensity of an economy--that is, greenhouse emissions per unit of GDP. As our economy soared, our emissions rose only slightly; from 2000 to 2004, we reduced the greenhouse gas intensity of the U.S. economy by 7.5 percent. That is a good result.
How did the EU-25 perform? They also saw a reduction in greenhouse gas intensity. Theirs was about 4.5 percent. Also a good result, though not quite as steep a decline as the United States.
How did the United States achieve this lower emissions intensity ratio? By working very hard to bring cleaner technology into the marketplace. Through a combination of targeted market decisions, incentives, voluntary partnerships and mandates, the Administration's policies have helped speed the deployment of cleaner technology.
And this is the key: Kyoto provides a target for emissions reductions. To actually cut the emissions -whether one is a Kyoto country or not--one needs to put new, cleaner technology in place. And this is where the United States is leading the world. Our approach is producing concrete results, even as our economy expands.
And that, in fact, gets to the heart of the issue. We all want jobs, education, health, poverty reduction--all the things a healthy, growing economy provides. So the trick is not to cut our economies, but make them cleaner even as they grow.
And this brings me to my second point. Cutting our economies--or even just holding them in place--with zero further growth, jobs, or human development, is not an option for any of us in the industrialized world. But in the still-developing world, new growth and human development is literally a matter of life and death.
We are all giving billions of dollars to help countries in Africa, Asia and Latin America reduce poverty, improve education, fight infectious disease such as HIV-AIDS and malaria, improve health and longevity, and protect the environment. It is a moral imperative. But aid is not enough--the only way for these countries to truly advance is through economic growth.
Yet, these regions also include some of the greatest emitters of greenhouse gases. As an example, the carbon dioxide emissions from non-OECD countries are expected to exceed those from OECD countries by 2010.
So these countries above all need an approach to cutting emissions that supports economic growth, rather than inhibiting it. And this approach, to be successful, needs to be market-driven. We cannot bring clean technologies into broad use if the profit motive is working in the other direction.
Thus the only way for these countries to minimize the increase in greenhouse gas emissions as their energy demand soars with economic growth is through the market application of cleaner technologies. We need to develop these technologies and bring them to the marketplaces of the developing world.
So we are investing heavily in clean technology and instituting policies to help it become cost-competitive. From Fiscal Year 2001 to the end of Fiscal Year 2006, the U.S. Government devoted more than $29 billion to climate science, technology, international assistance, and incentive programs.
$29 billion is a big number. To give you a sense of the significance of that investment, think of the GDP of Bulgaria, one of the newest members of the European Union. Its 2006 GDP was just over $28 billion. So essentially, over the past five years, the United States has taken more than the economic output of Bulgaria in a year and put it against the challenge of climate change.
Our approach focuses on a broad mix of various technologies, public-private partnerships, and finance. I will mention only a few specifics now, but I have a handout I can distribute with more information on each program.
Most newsworthy of late are the President's proposals in his recent State of the Union address, although it is important to bear in mind that the President has talked about climate change for years, and has adopted concrete measures to address it. What he did at his State of the Union speech was to set some new and ambitious mandatory targets, that will make a real difference in meeting the challenges of climate change and energy security.
The plan includes a comprehensive scheme to reduce gasoline usage in the United States by 20 percent over one decade--20 in 10. Such a reduction will curb the projected growth of carbon dioxide emissions from U.S. passenger vehicles and will reduce our dependence on oil, which has left us vulnerable to hostile regimes and terrorists.
There are many features of the plan that are noteworthy, but I'd like to underline two. One is the focus on road transportation, which is one of the largest sources of U.S. greenhouse gas emissions, accounting for over 22% of our emissions in 2004. The President's plan to reform and modernize corporate average fuel economy (CAFE) standards for cars will reduce projected annual gasoline use by up to 32 billion liters in 2017.
The second is that we are rapidly accelerating the deployment of renewable fuels. The United States is already the global leader in the production of biofuels. But under the President's new plan, we will raise the mandatory fuels standard to require the use of 132.5 billion liters of renewable and alternative fuels by 2017--nearly five times the 2012 target now in law. And in response to President Bush's policies, U.S. industry has put 6 million Flex-Fuel vehicles (FFVs) on the road with a million more rolling out each year, ensuring we have the cars to use the fuel!
These are not mere abstractions, but undertakings that will have a real impact on the environment. The increase in renewable fuels will displace as much as 15 percent of projected annual gasoline use. And these commitments come on top of the President's prior target of reducing the greenhouse gas intensity of the U.S. economy by 18 percent by 2012--a goal we are well on track to achieve.
The important thing of course is how all this will affect the environment. The measures announced in the State of the Union could cut annual carbon dioxide emissions by 10 percent, or around 175 million metric tons, by 2017. In a language we can all understand, this would be the equivalent of taking 26 million automobiles off the road today.
Consider the positive impact on human health. Fine particle pollution is killing close to 300,000 Europeans per year. In the United States, largely because of fuel standards already in place, the number is about 30,000. And the increased ethanol blending with petroleum fuels will all but eliminate the fine particle pollution problem in the United States.
You can go to the White House website for chapter and verse on this plan, but I'd like to emphasize something here today. President Bush's plan builds on a long record of action on global climate change that all too often goes overlooked.
There's the Clean Coal Initiative, a plan to deploy advanced coal technology for cleaner and ultimately emissions-free energy. In November we announced $1 billion in new tax credits for nine projects in nine U.S. states to construct, on a commercial scale, coal power plants that will be cleaner than any ever before. We will continue the program next year, when another $650 million in tax credits will be available.
Another program is the Methane to Markets Partnership, an international initiative launched by President Bush in 2004, in which the U.S. and other countries partner with industry to recover and use methane as a fuel source. The Methane to Markets Partnership is cutting a huge amount of emissions right now. Germany, by the way, joined last summer, bringing membership to 18 countries.
Another important initiative is the Asia Pacific Partnership on Clean Development and Climate (APP). It produces results where they matter most--the major emissions-producers of the world, and the major new energy-consumers of the world.
We started the APP a year ago to bring China, India, Japan, South Korea and Australia together with the United States to tackle complementary energy, economic and environmental goals. These countries account for about 50 percent of the global population, 50 percent of the economy, and 50 percent of the energy use. If that's not multilateral, nothing is. And the converse--trying to craft a global climate policy without these countries--would be futile.
Typifying the approach of the APP and the Methane-to-Markets Partnership is Caterpillar's roughly $60 million contract with China's Shanxi Jincheng Anthracite Coal Mining Group that will provide 60 methane-gas-powered generator sets to capture the gas and convert it into 120 megawatts of power. This will reduce greenhouse gas emissions by 4.5 million tons over a 20-year period while improving the capacity of the Chinese power grid.
In just six months, APP task forces have identified almost 100 projects that will deliver the multiple benefits of reduced greenhouse gas emission, cleaner air quality, and reduced poverty levels. Our commitment includes $52 million in the President's 2007 budget. This growth-based approach to reduced emissions is appealing. China and India's active engagement underscores the importance of involving these two countries in any solution to the climate change challenge.
Which brings me to my third and final point. The need for change stems not just from the facts that burning fossil fuels produces greenhouse gases, nor that the current high price of oil and gas has been a drag on our economies. It also comes from the fact that much of the money we spend to burn fossil fuel and add greenhouse gases to the atmosphere gets into the hands of people who use it to oppose democracy and human development.
It has helped the Holocaust-denying government in Tehran to bankroll militias trying to wreak havoc with the fledgling democracies in Lebanon and Iraq. It has helped Hugo Chavez fund anti-democratic movements in South and Central America, and to keep in place a Castro family dictatorship that oppresses the Cuban people. And there's little question that the oil money going to the government of Sudan helps prolong the terrible humanitarian tragedy in Darfur. Some oil money finds its way to support certain madrassas in Pakistan or elsewhere, which teach extremism and hatred of the West to children who are there only to read and write.
Our dependence on oil and gas allows governments who supply it to use that dependence for political ends. When Gazprom shut off supply to Ukraine and Georgia on New Year's Eve last winter, it exposed the linkages between energy, independence and democracy.
Clearly, almost everything we do for our climate has an impact on energy security. The relationship between the need for a diverse, secure energy supply, clean global climate, and democratic and economic freedom is becoming more evident all the time. All of these are critical for human well-being, and they are more than just interrelated--if we address one of these challenges, we address them all.
The United States is continuing its engagement with Europe as it works across all these fronts, including in our U.S.-EU High Level Dialogue on Climate, Energy and Sustainable development, which met in Helsinki last year and which we hope will meet again soon in the German EU Presidency.
We can't wait for 2012; the future is today. We mustn't mistake process with outcome, and we mustn't confuse the means and the objectives. The Kyoto Protocol is one means that some nations have chosen to address greenhouse gas emissions. But the objective--our common objective--is the reduction of greenhouse gases, and there are multiple means for getting there. And my government is committed to this effort. I have tried to demonstrate to you today:
I hope I have achieved my goal of getting you to start to think differently about the United States, and our policies on climate change. Thank you for being an attentive audience. I would be delighted to take your questions.