Posted by: carboncreditsusa | May 28, 2009

U.S. And China End Climate Change Talks With Little Resolved

Five days of talks aimed at bringing China and the United States closer together on the issue of climate change did not yield substantial progress, according to a Congressional delegation that met with environmental officials and the country’s top leaders this week.

During a news conference on Thursday night, Nancy Pelosi, the speaker of House, said she was “hopeful” after meeting with a number of officials, including President Hu Jintao and Prime Minister Wen Jiabao.

But Representative F. James Sensenbrenner, a Wisconsin Republican who took part, said he was discouraged by the Chinese refusal to commit to greater cuts in greenhouse gases while insisting that developed nations do more to reduce their emissions.

“It’s business as usual for China,” said Mr. Sensenbrenner, the ranking Republican on the House Select Committee for Energy Independence and Global Warming. “The message that I received was that China was going to do it their way regardless of what the rest of the world negotiates in Copenhagen.”

He was referring to the United Nations summit on climate change to be held in Denmark this year, the successor to the meeting in Kyoto, Japan, which produced the last global warming agreement in 1997. In previous statements, China has suggested that developed nations reduce emissions by 40 percent by 2020 from 1995 levels. By contrast, Mr. Sensenbrenner said, Chinese officials have linked their proposed reductions to the size of China’s economy, which is growing significantly. The resulting math, he said, would mean “a significant increase in emissions in China.”

China and the United States are responsible for nearly half the world’s output of carbon gases, although many scientists say the Chinese share is larger and growing at a rapid pace due to its reliance on coal-fired power plants.


“If the question is whether India will take on binding emission reduction commitments, the answer is no. It is morally wrong for us to agree to reduce when 40 percent of Indians do not have access to electricity,” said a member of the Indian delegation to the recently concluded U.N. conference in Bonn, Germany, which is a prelude to a Copenhagen summit in December on climate change.

Days after the Obama administration unveiled a push to combat climate change, Indian officials said it was unlikely to prompt them to agree to binding emission cuts, a position among emerging economies that many say derails effective action.

 “Of course, everybody wants to go solar, but costs are very, very high.” India’s position goes to the heart of the vexing international debate over how quickly nations should try to phase out carbon-spewing fuels such as coal and switch to renewable energy sources such as wind and solar.

In India, the debate has been cast as a choice between pursuing urgently needed economic growth to reduce poverty and addressing climate change. More than 60 percent of India’s power is generated from coal. As India rapidly climbs the list of global polluters, analysts say coal will continue to fuel the economic demands of the country’s 1.1 billion people for two decades. But India has repeatedly said that it will not compromise on growth by committing to emission reduction goals set by developed nations, which it deems bigger culprits when it comes to pollution.

Jonathan Pershing, the U.S. deputy special envoy for climate change, said the Obama administration will bring a “much more detailed set of policies” to the next round of negotiations beginning June 1.

He said the plan would require all countries, including developing nations like China and India, to curb greenhouse gas emissions.

He also said it will focus on long-range goals for greenhouse gas emissions–as distant as 2050. This is undoubtedly because the Obama administration’s midterm goals do not match those being called for by the international community.

Obama wants the U.S. to reduce emissions to 1990 levels by 2020, and reduce levels progressively to 80% of 1990 levels by 2050. The European Union has proposed reductions of 25% to 35% compared with 1990 levels by 2020.

An alliance of small island states, backed by a dozen African and Latin American nations, urged developed nations to reduce emissions by at least 45% below 1990 levels by the year 2020.

Pershing said that for the U.S. “Those numbers will be determined by Congress,” which is currently debating climate change and energy legislation.

Delegates reportedly also discussed whether or not a new climate treaty should resemble the Kyoto Protocol and whether it should include a cap-and-trade framework modeled on the European Union’s trading system.

Annie Petsonk, international counsel for the Environmental Defense Fund, told the New York Times that while this approach seemed likely, one difficult question remains: Which countries will be required to cap emissions?

This year marks the 50th anniversary since the Antarctic Treaty was created to help govern and protect the frozen continent of Antarctica. Diplomats, scientists and others from treaty countries are meeting this week and next in the U.S. city of Baltimore, Maryland, to discuss various issues including how global warming is affecting the continent’s fragile environment. The most obvious signs of the changes are on the Antarctic Peninsula — as reporter Janice McDonald discovered on a recent trip to the region.

It’s understandable why the developing nations are reluctant to cut emissions — it means higher energy costs and reduced growth. China and India are more concerned with growing their economy, expanding access to electricity, and reducing poverty.

Last summer, China and the developing world announced the price for their cooperation on a global-warming treaty: up to 1% of the developed world’s gross domestic product. For the U.S., this would mean sending $140 billion a year to China, Iran, North Korea and Cuba, among other countries. This is in addition to the $28 billion we already distribute each year in foreign aid.

For a U.S. family of four, China’s demand comes to nearly $1,900 in yearly taxes. And that’s just the beginning.

The tenor of international climate negotiations has emboldened the Indian government to claim in a February filing with the United Nations that the West owes it billions of dollars in compensation for climate change. These payments, it said, should be mandatory and not “subject to decisions of developed country governments and legislatures.”

A November 2008 study by the MIT Joint Program on the Science and Policy of Global Change forecasts the international costs could be as much as $3 trillion by 2050 for developing nations to make the significant reductions in greenhouse gas emissions that scientists say are necessary. The MIT report says that the U.S. share would total nearly $1 trillion of these “international financial transfers of unprecedented scale.”

President Barack Obama recently unveiled a budget blueprint that called for a $646 billion climate tax through a carbon-trading system. Already, White House officials are saying this tax could be three times larger. That means a family of four could have to shell out nearly $45,000 in climate taxes during the coming decade.

For beleaguered U.S. taxpayers in a troubled economy, these numbers are disastrous.

The U.S. cannot reduce the growth of greenhouse gases in the earth’s atmosphere without the developing nations cutting their emissions as well. A 2007 study by the Battelle Memorial Institute found that if China, India and the other developing countries keep growing at current rates, they will emit nearly three times as much carbon dioxide as will the developed countries by the end of this century. But will China and India join in the effort to reduce CO2 emissions?

Stopping climate change, however, will require more than just action by the United States and China. Rather, the entire global community must work collaboratively to dramatically reduce greenhouse gas emissions in a way that promotes sustainable economic growth, increases energy security, and helps nations deliver greater prosperity for their people. And the time to start is not tomorrow, or the day after, but today.

President Barack Obama has made combating climate change a priority for his administration. Shortly after his election, he described the urgency of the situation in no uncertain terms:

“Now is the time to confront this challenge once and for all. Delay is no longer an option. Denial is no longer an acceptable response. The stakes are too high. The consequences, too serious.”  

In order to meet this enormous challenge, the United States and the People’s Republic of China will need to take action.  Together, our 2 countries account for more than 40 percent of the world’s emissions of greenhouse gas pollutants such as carbon dioxide and methane.  

On March 16, U.S. Special Envoy for Climate Change Todd Stern and Chinese Vice Chairman Xie Zhenhua of the National Development and Reform Commission of the People’s Republic of China, met at the U.S. Department of State to discuss this challenge and to prepare for international climate negotiations, which are scheduled to take place in early December in Copenhagen, Denmark.  

Special Envoy Stern acknowledged the broad work that China is already doing to address climate change, including China’s goals to improve energy efficiency and increase the production of energy from renewable sources. The United States is committed to transforming its economy to a low-carbon model, both to spur economic growth and to sharply reduce domestic greenhouse gas emissions. To avoid the catastrophic risk of climate change, however, both countries will have to scale up their efforts.

The Environmental Protection Agency’s new leadership, in a step toward confronting global warming, submitted a finding that will force the White House to decide whether to limit greenhouse gas emissions under the nearly 40-year-old Clean Air Act.

Under that law, EPA’s conclusion — that such emissions are pollutants that endanger the public’s health and welfare — could trigger a broad regulatory process affecting much of the U.S. economy as well as the nation’s future environmental trajectory. The agency’s finding, which was sent to the White House Office of Management and Budget without fanfare on Friday, also reversed one of the Bush administration’s landmark decisions on climate change, and it indicated anew that President Obama’s appointees will push to address the issue of warming despite the potential political costs.

In 2007, the Supreme Court instructed the Bush administration to determine whether greenhouse gases should be regulated under the Clean Air Act, but last July, then-EPA Administrator Stephen L. Johnson announced that the agency would instead seek months of public comment on the threat posed by global-warming pollution.

Interest groups and experts across the ideological spectrum described the EPA’s proposal yesterday as groundbreaking. But while environmentalists called it overdue and essential to curbing dangerous climate change, business representatives warned that it could hobble the nation’s economic recovery.

“This is historic news,” said Frank O’Donnell, who heads the environmental watchdog group Clean Air Watch. “It will set the stage for the first-ever national limits on global-warming pollution. And it is likely to help light a fire under Congress to get moving.”

But William L. Kovacs, vice president of environment, technology and regulatory affairs at the U.S. Chamber of Commerce, said an effort to regulate greenhouse gases based on the EPA’s scientific finding “will be devastating to the economy.”

“By moving forward with the endangerment finding on greenhouse gases, EPA is putting in motion a set of decisions that may have far-reaching unintended consequences,” he said. “Specifically, once the finding is made, no matter how limited, some environmental groups will sue to make sure it is applied to all aspects of the Clean Air Act.”

“Now, the experience of a cap-and-trade system thus far is that if you’re giving away carbon permits for free, then basically you’re not really pricing the thing and it doesn’t work, or people can game the system in so many ways that it’s not creating the incentive structures that we’re looking for,” Obama said.

“The way that the allowances are distributed matters hugely for the success of the program,” Burtraw said. “But for the most part, it does not matter directly for the kinds of emission reductions you’re going to see. The primary influence is the existence of an emissions cap.”

President Obama’s comments yesterday in support of climate change legislation included two errors on the fundamental design and history of the cap-and-trade approach that his new administration intends as the centerpiece of its global warming policy, according to several experts tracking the Capitol Hill debate.

Appearing before CEOs at the Business Roundtable in Washington, Obama fielded a question about his campaign pledge to distribute allowances for emissions of greenhouse gases via a 100 percent auction.

The president replied with a warning against giving away too many free allowances to industry for compliance with a cap-and-trade system.

“Now, the experience of a cap-and-trade system thus far is that if you’re giving away carbon permits for free, then basically you’re not really pricing the thing and it doesn’t work, or people can game the system in so many ways that it’s not creating the incentive structures that we’re looking for,” Obama said.

A pair of leading climate economists say the president’s comments glossed over a key point in the cap-and-trade debate.

So long as the government caps emissions, companies will see a price signal and be forced to act, Harvard University’s Robert Stavins said.

“If you give permits away for free or sell them, either way, allowances will be priced and the system will work,” Stavins said in an interview. “There may be sound arguments that the administration wishes to make for auctioning allowances, but the functioning of the price mechanism and the environmental performance of the system is not one of them.”

Dallas Burtraw, a senior fellow at the nonpartisan Resources for the Future think tank, agreed with Stavins’ assessment.

“The way that the allowances are distributed matters hugely for the success of the program,” Burtraw said. “But for the most part, it does not matter directly for the kinds of emission reductions you’re going to see. The primary influence is the existence of an emissions cap.”

Obama also erred in overstating the role of emissions auctions during the implementation of the sulfur dioxide trading program created through the 1990 Clean Air Act Amendments.

“We put in an auction system and a trading mechanism and, lo and behold, American ingenuity and American entrepreneurship and inventiveness created options that ended up being much cheaper than anybody had imagined — much cheaper than anybody had imagined,” the president said.

But the 1990 law signed by President George H.W. Bush required U.S. EPA to auction about 3 percent of the cap-and-trade credits. Electric utilities got the rest for free based on their historical emission levels.

“I’m not sure that’s the example one wants to give,” Stavins said, citing instead the Northeastern states’ Regional Greenhouse Gas Initiative, which so far has required electric utilities to purchase credits via auction.

The first mandatory national system for reporting emissions of carbon dioxide and other greenhouse gases produced by major sources in the United States has been proposed by the U.S. Environmental Protection Agency.

“Our efforts to confront climate change must be guided by the best possible information,” said EPA Administrator Lisa Jackson, announcing the proposal on Tuesday. “Through this new reporting, we will have comprehensive and accurate data about the production of greenhouse gases.”

Greenhouse gases trap heat from the Sun and warm the planet’s surface. According to the U.S. Department of Energy, 87 percent of U.S. greenhouse gas emissions are related to energy consumption. Since 1990, greenhouse gas emissions in the United States have grown by about one percent per year. In 2005, about 21 percent of the world’s total energy-related carbon dioxide was emitted by the United States.

Under the proposed rule, the federal government could collect emissions data to inform future policy decisions.

The new reporting requirements would apply to suppliers of fossil fuel and industrial chemicals, manufacturers of motor vehicles and engines, as well as large direct emitters of greenhouse gases with emissions equal to or greater than a threshold of 25,000 metric tons per year.

Most small businesses would not be required to report their emissions because their emissions fall below the threshold.

One environmentalist tracking the debate says Waxman “is making a gamble that he can get this done quickly while Obama’s popularity is high.”

A cap-and-trade system would involve the federal government setting yearly limits on total greenhouse gas emissions such as carbon dioxide. Washington would then allocate emission credits that could be traded, banked, or sold to meet the cap. Each credit would allow a factory or coal-fueled power plant to emit 1 ton of greenhouse gases.


Henry Arnold Waxman, 69, is a Democrat from California who has called Congress home for half his life. He has long inspired strong views on Capitol Hill, where some regard him as one of his generation’s great lawmakers and a relentless champion for the common good, even as others dismiss him as a partisan pit bull with an insatiable appetite for headlines.

Either way, one thing is certain: One of his top concerns has long been global warming, and after dethroning a fellow Democrat to win the chairmanship of the House Energy and Commerce Committee, he’s vowing quick action on comprehensive energy legislation containing provisions to reduce greenhouse gas emissions.

If America doesn’t act, Waxman warns, the country will pay a hefty price in terms of health, the environment, national security, and global instability. “We’re more and more suffering the consequences of global warming and climate change, which scientists tell us could be irreversible if we don’t take very serious action now,” he says.

Waxman wants his new committee to have a bill to curb carbon emissions prepared by April so that it can be approved by the panel before Memorial Day. President Barack Obama, he says, “has called upon us to move forward in this area. It’s something that we can no longer neglect.”

Opponents, starting with the top Republican on the committee, argue that the science isn’t proved and the timing, with countries around the world mired in recession, isn’t right. House Republican Joe Barton of Texas, a former chair of the panel and now its ranking member, says a sure way to turn a severe economic downturn into a depression is to pass a “cockamamie climate change bill” that includes mandatory cap-and-trade provisions.

A cap-and-trade system would involve the federal government setting yearly limits on total greenhouse gas emissions such as carbon dioxide. Washington would then allocate emission credits that could be traded, banked, or sold to meet the cap. Each credit would allow a factory or coal-fueled power plant to emit 1 ton of greenhouse gases.

Advocates believe the provisions would spur private-sector innovations, keeping the United States at the cutting edge of new energy technology and energy efficiency. Opponents envision industrial jobs going overseas. Waxman, addressing critics who warn about the risk of outsourcing, says doing nothing about global warning would result in an economy worse off than it is now, with damage to public health, the environment, “even our cities, our agriculture, our forests, and our national security.”

As draft legislation is hammered out and congressional hearings are underway, Waxman is showing few of his cards, careful to avoid being pinned down on exactly what he’d like in a bill or how much he’d concede. Whether the full House and Senate would approve climate legislation is also unclear, particularly in an area where Democrats, some from manufacturing bases or coal-producing regions, tend to be divided by regional interests.

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