Event Summary: U.S. Climate Policy Toward a Sensible Center

June 24, 2004

The Brookings Institution and the Pew Center for Global Climate Change convened a diverse and bipartisan group of policymakers, research analysts, and scientists on Thursday to discuss the growing threat posed by global warming and to consider approaches to climate change that would be effective and sensitive to economic, political, and international realities. The debate primarily focused on whether the United States should pursue voluntary or mandatory climate policies at the federal level.

“We know there is a long and menacing shadow marching towards our shores, towards our cities, and our towns,” Senator Joseph Lieberman (D-Conn.) said. “But we know if we act now it is not a conqueror to be feared.”

“Climate is real, it’s devastating, and it’s going to have a dramatic impact on our children and grandchildren,” Senator John McCain (R-Ariz.) said.

Senators Lieberman and McCain (R-Ariz.) promoted the Climate Stewardship Act that they introduced in the Congress in January 2003. The bill calls on large companies to reduce their emissions to 2000 levels by 2010. The bill provides for flexibility in achieving those reductions through an emissions trading system similar to one for sulfur dioxide that was initiated as part of the Clean Air Act Amendments of 1990 during the first Bush administration. The eagerness of the two senators to bridge the political divide suggests that there is a growing bipartisan commitment to slow global warming through mandatory federal regulation. McCain admitted that the Climate Stewardship Act faced an uphill battle in the Senate (only forty-three senators voted for the bill in October 2003). Known for his dogged pursuit of legislative goals, McCain expressed confidence that the bill would ultimately gain passage in the Senate and then more swift approval in the House.

Although doubts about the severity and accuracy of the problem posed by global warming have clouded the debate since its inception, there is now a consensus within the scientific community that global warming is affecting the planet’s ecosystems. Consequences include a rise in sea levels, coastal erosion, and flooding—all of which threaten ecosystems and human life.

“There is no longer any doubt about whether global temperatures will rise,” said Science Editor-in-Chief Donald Kennedy. “The only disagreement is about how much. There will be substantial changes in the nature of human life on the only planet that we currently occupy.”

“Everybody has their own expert on this,” McCain said. “Everybody is entitled to their opinions, but there’s only one set of facts.”

The challenge in Washington, DC, conference participants agreed, was to build bipartisan support for sensible, centrist policies.

Energy Secretary Spencer Abraham praised the administration for “making good progress” towards reducing greenhouse gases and other emissions. Abraham reaffirmed the administration’s commitment to providing a diverse and clean energy supply, and he cited six elements of the Bush Administration technology program including (1) efforts to develop a hydrogen economy, (2) the support of “FutureGen”(the goal of a zero emissions coal power plant), (3) the continued role of nuclear power in the energy mix, (4) long-term research and development into nuclear fusion, (5) greater energy efficiency and (6) the expanded role for renewable energy.

“Energy efficiency and renewable energy are not afterthoughts in our department,” Abraham said. “We’ve exceeded funding levels during any of the twenty years prior to the Bush administration.” Abraham said that the administration has committed to $25 billion for research and development on renewable resources over the next five years.

Lieberman did not share Abraham’s optimism, however. Stealing a line from one of this summer’s blockbuster movies, Lieberman said, “we certainly must get started today…We cannot wait until the day after tomorrow.”

McCain characteristically took a mild swipe at the president, saying that “we’ve got to get more support from this administration than we have.” Lieberman agreed, denouncing the Bush administration’s “lack of leadership” on this topic.

John Rowe, chairman and CEO of Exelon Corporation, one of the nation’s largest utilities, agreed that climate change was a serious problem, but stopped short of endorsing the McCain-Lieberman bill, citing the legislation’s lack of an economic “safety valve” mechanism that would guarantee low costs, and ambiguity on how emissions rights would be allocated. Rowe, who also co-chairs the National Commission on Energy Policy, endorsed a mandatory ‘cap and trade’ system at the federal level. ‘Cap and trade’ sets limits on emissions, but allows markets great flexibility in meeting those caps.

Some policymakers and business leaders in attendance cited concerns about the economic and competitiveness effects of mandatory federal climate change regulation. Michael Morris, CEO of American Electric Power, said that the science of climate change is real and he argued forcefully for a more aggressive U.S. policy. However, he said that the government needs to ensure that other countries like China do their fair share as well before adopting mandatory policies, such as the McCain-Lieberman bill.

Lieberman was sympathetic to such concerns, but said that the relatively moderate benchmarks required by the Climate Stewardship Act were a “perfectly reasonable thing to ask” and merely a way to avoid worsening the problem.

McCain rejected the idea that action on climate change would seriously hurt the economy, and suggested that opponents look at the equation in a different light. “You’ve got to look at it this way: The damaging economic effects of not doing anything would be devastating,” McCain said. “The economic effects of global warming would be phenomenal.”

Lieberman said the nation’s failure to take the lead on emission-reducing technologies would not only endanger the environment, but also allow other countries to outpace the United States in developing promising new high-tech industries.

Lieberman and others were quick to dismiss doubts that quick action on this issue was both impossible and impractical. Lieberman cited John F. Kennedy’s pledge to put a man on the moon as an example of American ingenuity and dedication. Former CIA Director R. James Woolsey cited America’s transformation of its manufacturing base during World War II as an illustration of the nation’s ability to act decisively.

“In six months, we turned Detroit from an auto-making city to a tank-making city,” Woolsey said. “To suggest that we need to wait fifteen years to begin reducing toxic emissions is simply ridiculous.”

Woolsey also made the case that excessive U.S. dependence on oil constitutes a security threat. He said that the U.S. could reduce its vulnerability to politically unstable oil through a more rapid diffusion of existing technologies like hybrid automobiles and non-corn based ethanol. Together, these two technologies could increase fuel efficiency to the equivalent of about 300 miles per gallon.

Several speakers highlighted other aspects of the challenge of climate change. Fred Bergsten, director of the Institute for International Economics, noted that the OPEC cartel has artificially kept oil prices about 50-100% higher, on average, than a competitive market. He suggested that both the volatility of oil prices and higher average prices cost the U.S. one percent of its GDP per annum. In his view, policies to reduce the high cost of energy would accelerate U.S. economic growth and make it safer politically for policymakers to enact climate-friendly policies.

Larry Schweiger, president of the National Wildlife Federation, said that the harmful effects of climate change on wilderness and wildlife were already present. He cited recent polling of hunters and sportsmen (who voted overwhelmingly for George W. Bush in 2000) as evidence that large majorities of sportsmen are concerned about climate change and favor stronger action.

During the Business and State Government Roundtable, in which participants focused on the progress being made in their respective companies and states, Toyota Vice President Jo Cooper said that making low and zero emissions automobiles like the gas-electric hybrid Prius is key to the company’s financial success. Chris Mottershead of British Petroleum noted that his company’s experience in reducing greenhouse gases and increasing energy efficiency, reaped a financial windfall of $650 million. Mottershead called for stronger government leadership in articulating a long plan for reducing global warming and marshaling business support. A ‘cap and trade’ program would be indispensable towards those ends, he said.

Stephanie Timmermeyer, head of West Virginia’s Department of Environmental Protection, noted that West Virginia’s Governor Bob Wise views sound action on climate change as essential in securing West Virginia’s economic future. Although Wise does not favor mandatory federal regulation, he does believe that larger investments in clean coal and better greenhouse gas inventories are needed. Doug Foy, Secretary of Commonwealth Development in Massachusetts, highlighted the enormous progress that can be made by integrating climate change thinking into all aspects of government. He described an ambitious suite of policies that Massachusetts has enacted, including incentives for siting new schools and government procurement policies.