Campaign 2008:

Policy directors for top White House contenders discuss climate change, energy policy

With all the focus being paid to climate change internationally, on Capitol Hill and throughout the United States, the issue will likely play a major role in the 2008 presidential elections. During today's E&ETV Event Coverage of a recent Brookings Institution panel discussion, policy directors for four major candidates discuss climate change and energy policy. Panelists include, James Kvaal of John Edwards for America, Denis McDonough of Obama for America, John Raidt of McCain 2008 and Todd Stern of the Hillary Clinton for President Exploratory Committee. They discuss the candidates’ goals for climate and energy, whether nuclear and coal to liquids will play a part in future energy policy and whether or not the United States should wait for an international agreement on climate policy.

Transcript

Rick Klein: Happy to be with you this morning, and thanks, everyone, for attending. This panel is going to be a little bit different than the last one. We're going to take some of the lessons we learned before, some of the things we know already, and move it into the context of the 2008 Presidential Campaign.

And as you all know, this is an issue that's very ripe right now. We're not hearing a lot about it yet in the 2008 campaign, but we will continue to hear about it, and we've seen really this entire issue change over the last few years in a pretty extraordinary way, where there really isn't a major debate in Washington anymore over whether climate change is happening, it has moved to what we're going to do about it.

But there's been, I think most would agree, very little action on that front, and that's really where our panel comes in. We have representatives from four of the Presidential campaigns. I should also note that we extended invitations to the Romney and Giuliani campaigns and they declined to send participants, although they did express an interest in perhaps doing so at a later date. So I'd like to just briefly introduce the panel, and we'll get a discussion going, and then leave a lot of time for questions at the end. Starting right here on my right, we have Todd Stern, a policy adviser for the Hillary Clinton Presidential Exploratory Committee. Mr. Stern is part of the Wilmer Hale practice here in Washington and a Senior Fellow at the Center for American Progress.

James Kvaal, policy director for the John Edwards campaign joining us today from Chapel Hill; thanks a lot for making the trip. And Denis McDonough, policy adviser for the Obama for America campaign, also with the Center for American Progress. And via video conference, thanks for joining us, John Raidt, who is a senior policy adviser for John McCain and a long-time aide to Senator McCain.

I'd like to start the discussion, just instead of opening statements, just asking everyone to go down the line with one particular question, and that is, what the single most important thing that the next President can do to address climate change. What are we going to see in the first hundred day, say, of the presidency of the various campaigns that you represent? Mr. Stern.

Todd Stern: Well, I would say most broadly, Rick, that -- I think that Senator Clinton would completely reverse the approach that this Administration has taken by reasserting the White House leadership, both the domestic, front, and abroad, and recognizing that we have a moment here, I think we have a genuine moment of challenge and opportunity with respect to the climate and energy issue. This Administration has been in a state of denial for the last six and a half years, and both oil dependency and the greenhouse gas problem has gotten a lot worse. I think Senator Clinton is a believer in solving problems and a believer that the American people rise to the challenge if they're given that challenge and they're given some leadership.

I think there's three ways fundamentally that you can reduce greenhouse gas; one is to significantly improve the efficiency in the way to use fossil fuels, second is to substitute out other kinds of fuel, other kinds of energy instead of fossil, and the third is to capture and sequester omissions from fossil, and she's going to move on all three fronts.

And I think decisively three I think main areas, policy areas in which she's proposing to do that, one is an aggressive cap and trade program, another is significant, robust efficiency standards for cars linked together with manufacturing incentives so that Detroit can get onto the field in a competitive way with respect to high efficiency cars, and then in addition, she propose a strategic energy fund which is really designed to kind of divert, move incentives away from oil companies into clean energy.

And then finally, I think that she's quite aware that this is a global problem that's got to be addressed globally. And I think the only viable way to go with that is, first of all, to reestablish U.S. credibility by enacting a convincing program here at home, a convincing mandatory program, and then in addition, an active effort diplomatically, at all levels, not just the broad U.N. level, but also the smaller groupings, like the G8, and in an aggressive bilateral diplomacy, in particular with China and other key countries.

James Kvaal: I would certainly agree with what Todd said, that this is both a huge challenge and a huge opportunity, that's how Senator Edwards sees it, as well. Global warming requires some dramatic changes without really rethinking how we power our economy in the coming decades.

We're going to have potential for tens of millions of refugees every year, ultimately hundreds of millions of people starving to death. So this is something that we need to start acting on now, but it also creates a tremendous opportunity for us by building what he calls the new energy economy.

We can create new jobs across American, we can revitalize rural areas with bio fuels, wind and solar, we can revitalize our manufacturing industry, we can take advantage of the same innovators that led the internet boom and are now investing in clean tack in Silicon Valley.

I think the single most important piece of that is putting a price on carbon omissions, to send the signal that our economy is going to be run different in the future. Senator Edwards has endorsed a goal of reducing carbon omissions by 80 percent by 2050, and that's based upon what the latest science says is necessary to prevent the worst impacts of global warming. So he thinks it's important that we take the steps that are necessary to protect our climate and not begin compromising before it's over. He also has proposed auctioning off $10 billion of these permits to finance the new energy economy fund, which would invest in renewal of energy, energy efficiency, and also help some industries make the transition to the new energy economy, the auto industry and the coal industry in particular.

So that I think is the single most important thing that he has proposed. And from the reaction that he's getting out on the campaign trail, I think people are ready for it. One of his biggest applause lines is that it's time to ask the American people to be patriotic about something other than war and to try and make the transitions we need to address global warming and shift to cleaner for energy.

Denis McDonough Thanks, Rick. If I had to put a word on it for Senator Obama's efforts on energy and climate, it would have to be urgency. I think that he recognizes very clearly that this is an urgent problem that we've now lost far too much time in addressing and that it can't, frankly, wait until he's in the White House, but when he is in the White House, he will make this a principal assignment that's handled, issue priority area that's handled from the White House itself that will allow a multi-faceted domestic energy conservation efficiency effort, coupled with a very aggressive international diplomatic effort, to make sure that no only are we taking the right steps, but the next generation of leading admitters are doing the same thing.

Let me just give you a couple of examples. I think, as both Todd and Jim said, that the easiest step that we can take is also the cheapest, which is efficiency. There's no reason that we can't save as much as 20 percent of the energy that we currently consume in this country by just being more efficient about how we use it.

Secondly, we have to ultimately look for alternatives to fossil fuel. And Senator Obama, again, is not waiting for 2009, January 20, 2009, he's actually moving now. He just introduced a very innovative alternative fuels standard, a low carbon fuel standard, that seeks to incentivize the use of lower carbon alternatives to oil and gas for our transportation fuels by setting -- mandating a very aggressive target at 2015 and 2020, so that we get to that point in 2020 where we're already well along the way toward the notional goal that Jim just talked about, which is an 80 percent reduction over 1990 levels by 2050.

And then lastly, it's just, as I think you'll hear from each of us, far past time for the United States to not only join the rest of the world, but lead the rest of the world in an effective cap and trade system that mandates very aggressive reductions, but also creates the incentives and creates the capital to make sure that we have revenue to fund the next generation of low carbon alternatives, be they electricity alternatives, transportation fuel alternatives. At the end of the day, the cap and trade is the start of that effort.

And again, he's not waiting for 2009 to do that, he's aggressively supporting as many proposals as he can in the Senate to get that done. And I think you'll see during the debate, in the Senate in June and July, his aggressive efforts to do just that. So at the end of the day, if I could put one word on it, it's urgency.

This is a problem that's far past its prime. There's not even any debate about whether it's a problem or not, which is actually progress in Washington, but it now has to be confronted with the urgency that it demands.

Rick Klein: Mr. Raidt.

John Raidt: Rick, thanks again for letting me join you, I appreciate the opportunity. I think if I would have to choose one word, it would be leadership. We're at a very critical time where the confluence of three great challenges, and the national security implications of climate change, the economic security of climate change, and the environmental challenges, we have this confluence of these three great challenges, and it's really going to take leadership to bring all sectors of a society together to move forward in a responsible way. Senator McCain is certainly no newcomer to this issue, he's been talking about it for a long time, and had a proposal in the Senate a number of years co-sponsored by a number of his colleagues including Senator Lieberman, and so he's been with this for a while and will continue to show the leadership necessary to move forward.

Rick Klein: I'd like to get into a little bit the way that we're going to see this issue play out in the politics of the primary campaign since we're in the midst of that right now. And I'd like to start with you, Mr. Raidt.

I happened to notice the other day, the Associated Press had been asking the various presidential candidates to name the last book of fiction that they read, and Tom Tancredo a Congressman from Colorado who's running for president said, "Inconvenient Truth" by Al Gore.

Now, Tom Tancredo is, you know, not among the top tier of candidates right now, but there is a major segment of the Republican Party who continue to believe that global warming is not occurring. Obviously, James Inhofe's greatest hoax that was perpetrated on the American people line has become famous.

Does Senator McCain plan to challenge the other candidates on this issue, to say them it's no longer a question of whether it's happening, we have to move beyond the debate, and to get beyond the slogan on it? Can he do that without risking some kind of backlash in the Republic Primaries?

John Raidt: Yeah, I don't think he worries about backlash. He believes what he believes, he believes the facts are clear, the consequences warrant -- are moving forward, and other candidates are going to believe what they believe, and the best he can do is stick by his convictions.

He delivered a speech a couple of weeks ago at the Center for Strategic International Studies where he laid out his views about the importance of climate change and that we are past the debate on science.

There's always a rhythm to these issues, they go back to clean air after any of the major environmental laws that have been passed have been beneficial. First there's the denial that there's a problem, and then once that is over with, then people start talking about the fact that, well, let's study it some more, and then there's the voluntary aspect of it, and then it becomes partisan, and then finally, because the public is demanding something, we get over the partisanship and actually pass something that's necessary.

So I think this issue is going to take that same path as these others have, and I think Senator McCain will just continue to focus on what the facts are and what he sees as the path forward that's best for the country and let other candidates speak for themselves.

Rick Klein: Coming at it from the other side of the political perspective here is the idea of a carbon tax. And we heard Greg Easterbrook talk about it a few minutes ago, and certainly it's what all economists who studied this issue will tell you is the most effective way to go if you really want to control omissions.

It's not enough to do cap and trade, maybe you compare it with cap and trade, but really, a carbon tax is where it's at. We're hearing that from Senator Dodd on the campaign trail. To this date, I don't believe he's got anyone with him; why not? Let me ask the surrogates for the -- the Democratic candidates, why not a carbon tax, is it just too politically difficult to get through, do you think it's bad on policy grounds?

Todd Stern: Well, you know, I think that a carbon tax is certainly an idea that is out there and a lot of economists look at. I don't think there's quite as much uniformity as you might suggest. I think there's two ways fundamentally to, in effect, impose a price on carbon.

I think everybody, Denis or somebody said here that, or James, that what's crucial is putting a price on carbon so that people in businesses and everybody in the country acts accordingly and makes judgments accordingly. I think that's clearly right. You can do that through a carbon tax, you can do that through cap and trade. I think that cap and trade has a significant advantage over carbon tax in that you get a lot more certainty with respect to the ultimate goal, which is to limit the amount of omissions. So in a cap and trade, you say omissions can go to X level, and you have a greater level of certainty in doing that than you would with carbon tax.

Senator Clinton has a lot of focus actually on taxes, but her focus is on reorienting the way tax incentives work right now, which are way too heavily skewed toward the oil industry and oil companies, and her strategic energy fund proposal or legislation that she's proposed in that regard would, again, would reorient those tax incentives toward clean energy, and her sense is that that's the best way to go right now.

Rick Klein: James, why not do both?

James Kvaal: Well, I'm not sure I see the advantage of doing both. You know, they are -- I think this idea out here that if you were brave and honest that you would be doing a carbon tax is not necessarily true.

As Todd said, a cap and trade -- well, I mean the way I look at it, a carbon tax is a tool to get at your goal by raising the price of carbon, but it doesn't actually set the goal itself. A cap and trade system sets the actual goal and provides some certainty that you will actually achieve the level of omissions that you're looking for. It's not -- you don't have to guess at what level of tax to set. So I think that's a big advantage of a cap and trade, especially when we're dealing with an issue as important as global warming, where we really don't want to step across the red line and create, you know, the vicious cycle of feedback effects that could be irreversible.

Another advantage of a cap and trade system is that it's consistent with the rest of the world, and so I think it's going to be easier for us to go to other countries and put our commitments on the table and show that they're comparable to their commitments if we have a global cap and trade system.

Rick Klein: Denis, I'd like you to address, and also if you can talk about how do you avoid the pitfalls in the European model; do you have any ideas?

Denis McDonough You know, Rick, it's a good question. It's astounding to me that sometimes when it's time to emulate something that's happening in the rest of the world, we say that, well, they failed at it so we're going to fail at it, too, when, in fact, the American -- more often than not is that regardless of how the rest of the world does that, we can succeed at it.

And I think the cap and -- the EEUETS is a perfect example of that. I think that there is gallons of ink being spilled on American papers at the moment about how failed that system is, and as a result, how failed our system would be, as well, when, in fact, a more pertinent and more accurate experience is the sulphur market and the acid rain market in the northeast and over the last two decades here in this country, which got to reductions by using a cap and trade model, got to reductions much quicker, much more cheaply, and much more effectively than we might have -- than all the nay-sayers were saying at the time.

So at the end of the day, I think we ought to certainly take advantage of the experience that has been developed in Brussels through the EEUETS, but there's no reason that we should think that the country that came up with a very effective model on acid rain cannot do exactly the same thing as it relates to carbon omissions.

Rick Klein: John, if you want to address what you think about a carbon tax.

John Raidt: I would; and obviously, Senator McCain has been a foremost proponent of cap and trade. The problem with a tax is that it won't work, it'll end up just raising money for the government, for bureaucrats, there's no guarantee where that money would go as opposed to setting a standard that has both economic and environmental integrity and letting America do what it does best, and that's innovating -- to meet a goal.

This idea of just slapping a tax on, it doesn't hold water, and I don't think it has support among the public, nor does it have support in Congress. So cap and trade is a market driven, proven, we've done this before, we can do it again and get it right.

Rick Klein: I wanted to talk a little bit about other energy sources that we could be developing here, and a couple of questions, first with regard to nuclear; do you see a role, do your candidates see a role, a major role for nuclear energy as part of an effort to achieve energy and dependence? And we'd love to throw around the slogan about energy independence, energy security. There's been a lot of concerns about nuclear over the years, have those concerns been answered? Maybe to vary it up, we'll start with Denis, if you don't mind.

Denis McDonough Well, I think that Senator Obama believes that, particularly in a carbon constrained economy, where we are taking account of the -- urgently taking account of the impact of carbon omissions on the world, that nuclear should be on the table. At the same time, however, there's a lot of different things that -- principally three big variables that need to be addressed, and first, obviously, is some kind of resolution on waste.

Senator Obama has been very solidly against using Yuka, and it seems to be that the insistence of the Administration on that has helped create this paralysis on getting some other workable solution.

Obviously, there has to be a very aggressive effort to increase public confidence, and waste is one variable of that. And ultimately, we also have to make sure that we're doing a better job on reactor safety. So, look, it's got to be on the table, particularly in a carbon constraint, but it's not going to get there unless we can resolve these three outstanding questions.

Rick Klein: James, does Senator Edwards see that nuclear is part of the equation?

James Kvaal: He's said that he does not think that we should be building more nuclear power plants until we resolve the waste question. Obviously, there are a lot of problems with the Yuka Mountain depository, which is what we've been pursuing now and spent billions on, and there are still questions about whether it can be kept safe from water, which is a primary threat, of course.

And so in his view, we should not be building more nuclear power plants until we know that we can dispose of the waste safely.

Rick Klein: Do you think that's realistic, Todd, to talk about this without talking about nuclear?

Todd Stern: Well, no, I think Senator Clinton thinks that nuclear has a role. I think, once again, there's a lot of violent agreement running around this room. But I think that her view is probably quite similar to the one that Denis just expressed with regard to Senator Obama.

Nuclear right now supplies 19 percent of our electricity. If you imagine that those plants just faded away, you'd have 19 percent of the nation's electricity that suddenly was -- if it wasn't replaced by renewables, it would potentially cause more greenhouse gases going to the atmosphere. So you've got plants that exist, you've got plants that have to get their licenses in some cases renewed. I think that it needs to be part of the equation, but you've got four big issues which are cost, safety, proliferation, and waste, and all of those are going to have to be dealt with.

So I think that Senator Clinton sees this as part of the equation, but with some very difficult questions that need to be wrestled, but that we need to wrestle with, not just that we should say they're tough questions, so we shunt it aside, but that we've got to wrestle with them.

Rick Klein: John, any thoughts on nuclear? And let me throw a clean coal in the mix, too. There's another one that we see some disagreement, whether it even exists, whether clean coal technology is realistic to expect.

John Raidt: Right; first on nuclear, Senator McCain has been a long standing proponent of nuclear power. He doesn't believe you can be serious about the problem of global warming and not serious about the nuclear part of the answer, and as Todd had mentioned, is 19 -- 20 percent of our current electric production, and the fact of the matter, it will be going away, because as the plants start decommission, that's going to get a lower and lower and lower figure, and unless we build more plants, it's not even going to maintain its 20 percent figure, which again, in this carbon constrained world, it's vital that it be a part of the mix. So when you look at other countries, whether it's Belgium, or France, or Japan, and see the percentage that they're using, America knows how to -- we've got over 100 plants, we need to be able to replace and build more to meet our goals. And I think that's why you see a lot of former opponents of nuclear power taking another look at it.

The former head of Greenpeace has become somewhat of an advocate, and others, so it's clear we have to do this.

Speaker: -- whether it even exists, whether technology is realistic.

Speaker: [inaudible] long-standing proponent of nuclear power. He doesn't believe you could be serious about the problem of global warming and not serious about nuclear as part of the answer. As Todd had mentioned, it's 19 to 20 percent of current election production and the fact of the matter is it will be going away because as plants are decommissioned, that's going to get a lower and lower and lower figure and unless we build more plants, it's not even going to maintain its 20-percent figure which again in an carbon-constrained world it is vital that it be a part of the mix.

When you look at other counties whether it's Belgian, France, or Japan and see the percentage that they're using, American -- we've got over 100 plants and we need to be able to replace and build more to meet our goals and I think that's why you see a lot of former opponents of nuclear power taking another look as the former head of Greenpeace has become somewhat of an advocate and others.

One more thing on nuclear, Senator McCain, among the first items that he -- remember Congressman Udall was a great advocate of the environment, he and Udall worked together on nuclear power and building plants that can be standardized and Udall saw the importance of nuclear to the future given air quality and climate, et cetera, and so it is important to move forward.

On the coal issue, we've got to be able to use our abundant resources of coal. As a matter of energy security, it's just essential. Senator McCain in his speech at CSIS talked about countries, including China, being able to use our abundant coal sources in a way that meets our environmental needs -- it's essential.

Speaker: Clean coal? Yes.

Speaker: Rick, let me just put one thing on the table, too, before we go to -- which is the overall usage of electricity in this country can actually come down. I think you have heard that in as Todd would say violent agreement. In California they use half the per capita kilowatt that the rest of the country does. Denmark has seen robust growth over the last 10 years despite the fact that their energy usage has basically remained the same. So efficiency is vital.

Secondly, on clean coal, I think that Senator Obama has been very clear that coal will have to be used in this country. He has also been very clear that things like coal to liquid should be on the table when we can sequester the carbon greenhouse gas byproduct of that technology. Last year China brought online as much electricity capacity as there exists in the entire U.K. So in 1 year China has brought on so much robust electricity capacity to fuel that growth in that country and it is overwhelmingly powered by coal. So if we can't get the technological advances and the innovation that will lead to not only our using coal cleaners but also then leading the world to use coal cleaners and in so doing generate jobs on this side of the ocean, then I think we're all going to be in a world of hurt. So clean coal technology is definitely on the table. It's going to take some leadership in the White House, and that's exactly what he's going to do.

Rick Klein: Any other thoughts of any of the panelists on coal?

Speaker: Yes. I would say unlike nuclear where nuclear plants are very expensive to build and take a long time to build and are never going to be a large part of our solution, like it or not, we're going to be using a lot of coal for a long time. We have a lot of it. So we need to find a way to use coal in a way that does not contribute to global warming.

Senator Edwards has proposed requiring all new coal plants to be built with the technology we need to capture carbon emissions so that those carbon emissions can be pumped underground. We don't have all the technology we need to do that successfully. Senator Edwards has proposed spending a billion dollars a year to accelerate that technology as quickly as possible. But at the same time, we need to start building coal plants now that have the capability to capture these carbon emissions because if we let coal plants get built now without that capability, we're locking in decades of very high carbon emissions levels.

Speaker: A few points on coal, and we do have a little moment of disagreement on this point, not on the broad front. The broad front is coal is absolutely a critical part of this equation. Eighty percent of our electricity is generated by coal which translates into about a third of all of our carbon emissions in the economy. They were not that many years ago talking about coal as part of the solution. Coal is sort of a dirty word in more ways than one, but it is a critical part of the equation now because it's a plentiful and cheap fuel and we're not going to banish it overnight or even for the next decade. So we have to pursue it.

The elements of the technology are all there. What hasn't happened is that they haven't been put together and demonstrated at scale and in full-blown demonstration plans. That's got to happen. The MIT report, a very good report, came out recently on the future of coal and calls for I think something like five domestic facilities, full-scale facilities in different geologic circumstances and overseas as well. Senator Clinton has called for $3-1/2 billion I believe to support RD&D, research, development and demonstration for such plants as part of her strategic energy fund and this needs to go forward rapidly.

The one little point of disagreement I would say is that I think Senator Clinton would be at least skeptical about the coal to liquids equation. Coal to liquid is a high-carbon creating form of fuel. If you don't sequester the carbon, it's about twice as polluting as oil, and even if you do sequester 90 percent of the carbon, it still going to be a bit more polluting than oil.

We have two challenges here which is oil security, we want to depend less on foreign oil but less on oil altogether for national security and other economic reasons, but also the climate challenge. We don't want to solve one, the oil security problem, while creating a bigger problem on the climate front. So at least some healthy skepticism on the coal to liquid side.

Rick Klein: One more round before we move to questions. This round I would like to start with our one Republican. Sorry to pick on you here, John. What can the next administration really do, and tell me what specifically President McCain would do to exert leadership on this question? Because as we know when we talked about the growth in energy use in China and India and others, if we do this alone, we are not going to be addressing climate change. We can get others to follow our lead, but that's a lot different. As step one obviously we're doing what we're talking about on this panel. Step two I would imagine is getting the world to follow. What can President McCain do on that level?

John Raidt: That's correct, and as Gregg had pointed out, we didn't anticipate that China's image would exceed ours for quite some time -- happens next year, it may even happen this year. What Senator McCain has said is that there are many reasons domestically why we need to have a cap and trade system and reduce greenhouses again as a matter of energy security, as a matter of environmental security, and as a matter of economic security. The technologies and the processes and energy sources that this would need going forward, that America should be at the forefront of developing those. So I don't think he thinks we should wait until the rest of the world acts for us to exercise traditional American leadership. So there are plenty of domestic reasons why to do that. I think that as we do that for our own reasons, reaching out, and as president I'm sure this is what he would do, reaching out to other countries not only as a matter of commerce, but here, we have the way to do this, to be able to have the abundant economical and environmentally safe technologies that we can sell the rest of the world.

And then I think one of the things that his bill does is allow us offsets from other areas. In other words, if you have a cap and trade system, that you're able to buy credits elsewhere. I think that naturally will involve other markets, et cetera, but I think it is a matter of, one, doing it because it's the right thing for America to do, exercising our leadership, and then working with other countries to bring them in not only just as a matter of politics but a matter of commerce.

Rick Klein: How about using trade pacts as a way to bring environmental standards and force other countries to boost their standards?

John Raidt: That is always a very sensitive issue because free trade is an important thing from any standpoint and it's always difficult when you complicate it with a lot of other issues that tend to make trade agreements never happen which is a negative for the United States. But I think on its own merits, the rest of the world is perceiving a need and an interest in doing this. I think just as you get over the learning curve and the urgency that is apparent to us, it's going to be apparent to other countries as well. I know China has a long, long way to go as does India and other countries, but I think they are going to come to see the importance of this for their own self-interest as well.

Rick Klein: How about President-Elect Edwards? What will he do to exert world leadership, to get the world to go along?

James Kvaal: There is no question that it's a critical part of solving this problem. He says that the first step is of course to get our own house in order and we are now one of three countries that is not signed on to Kyoto. So the first step is to start making some real commitments of our own to restore our own standing.

The second step is to offer to work with some of these countries and share the energy efficiency and the clear energy technology that we're developing and that is something that will not only help them along the road but also create markets for exports for American businesses. Finally, yes, if we're having trouble bringing along, he has said many times that he believes trade deals should have labor and environmental standards and he is open to making global warming commitments a part of that.

Rick Klein: Denis?

Denis McDonough I think that Senator Obama would see trade agreements and environmental standards as a very useful tool. I also think that when you looked at, Todd talked about developing the technology for carbon sequestration, the European Union currently has a pilot project that they're working with China on. There is no reason that we shouldn't be looking for ways innovatively to develop this technology overseas, obviously keeping in mind our intellectual property rights which is also astounding why the administration took 6 or 7 years to enforce the existing WTO agreement with China.

And then just some very simple things. The Export Import Bank reported last year in its annual report that it supported the export of $16 million in low-carbon energy from this country and upwards of $4 billion in hydrocarbons, simply backwards. At a time of huge profits for the oil companies we have the full bureaucracy of the American government aggressively supporting the export of technology for hydrocarbons. It's not the way it should be.

Consider further that the United States, the biggest economy in the world, if the fourth-largest producer of wind technology. It's lower than that on solar. These are tomorrow's technologies. You're looking at according to the Stern Report in any case by 2050 a half a trillion dollar market year on year. We ought to be getting a piece of that market, but we ought to be doing it today using the tools that are at our disposal, not underwriting the export of hydrocarbon, highly carbon-intensive technology, but looking at tomorrow's technology and tomorrow's jobs to make sure that we're doing it.

Rick Klein: Todd?

Todd Stern: First of all, I agree emphatically with the comments that Denis just made. I think that we ought to be using our export credit agency and I think we should be encouraging other OECD countries to be doing the same thing. I think we should be encouraging the World Bank to do much more in the way of financing the right kind of energy and not the wrong kind of energy. I think all of that is absolutely right.

On the broader and diplomatic question I think again there are two fundamental things that need to happen. First is that the U.S. simply has to establish its own credibility here and that means enacting a really serious and convincing domestic program. I don't think these things happen in sequence, I think these things happen in parallel, but that's got to happen so that the U.S. has a voice at the table based on what's doing itself.

Secondly, it has to in fact reengage in a way that it absolutely has abdicated. There was sort of a signature moment early on. I digress for half a second, but Bill Antholis and I wrote an op-ed in The Washington Post a month or so into the administration saying that Bush could be Nixon in China on this issue, but he of course went exactly the opposite direction.

The U.S. has to get back into the diplomatic area at all levels which is to say not just at the broader multilateral level, although it does need to go there, but it also needs to engage at smaller groupings. Tony Blair at the Gleneagles G-8 meeting 2 or 3 years ago brought in several of the top developing country emitters, climate change was a central focus of that meeting, and brought China, India, and Brazil and some of the others into that meeting. That is an important kind of forum for interacting and I think that the U.S. has to develop a very serious bilateral approach to key countries and in particular China. China and the U.S. are the 800-pound gorillas here. There is just no question about that. We have a common interest and this is an area where a real partnership is possible done the right way, but the issue has got to not go to the bottom of the talking points and the bottom of the list of the president's priorities, but have to be a central part of U.S. diplomacy at the bilateral, the small multilateral, and broader multilateral levels.

Rick Klein: I would like to turn to questions for the remainder of our time here. We've got about 20 to 25 minutes, so hopefully get some of them answered. Feel free to address questions to individual panelists or to the panel more generally. There in the middle in the gray shirt?

Richard Meyer: Thank you guys very much for coming. My name is Richard Meyer from American University. Tom Friedman has been writing a lot about the climate and energy issue lately and he has been quoted as saying green is the new red, white, and blue. By this obviously he means that the focus on green and environmentalism, specifically on sustainable technologies, alternative energies, and leadership on the climate change issue could really propel America and specifically the candidates running for president forward in the race for president.

Specifically he means by this we can create new jobs, keep America competitive in the international world on a globalized scale through new technological exports, and also build new diplomatic relationships. He characterizes this as a national security issue, global warming as a health issue, it's a religious issue, and it's an energy issue.

I wonder as a general question about how all the candidates feel about taking this approach looking at this. I guess I'll just throw it all at you guys since I'm nervous up here. Thanks.

Rick Klein: Does that contradict what anyone is talking about here?

Todd Stern: I entirely agree. I think Senator Clinton would entirely agree with that general orientation. Tom Friedman has been one of our most important writers in this area. It's not that many years ago when it was very difficult where the national security did not recognize this issue as really a central part of their focus and I think is dramatically changing. I was saying to somebody before the panel began that we are I think really in the middle of a tipping point kind of moment and more and more people have seen that. Bill alluded to the really interesting report that a group of I think 11 former generals and admirals put out recently which focused entirely on the national security threat not of the oil problem, that's also very real and very legitimate, but of the climate change problem per se and talked of climate change being a threat multiplier of security risks particularly in unstable states. So it is kind of uniquely maybe a problem that knits together economic national security, environmental, and if you will moral concerns, and I think Senator Clinton sees it that way.

Rick Klein: Any other responses?

James Kvaal: I would just add that it certainly has been a centerpiece of Senator Edwards's campaign. It was one of the very few priorities that he mentioned when he announced that he was running for president last December when he gave a very detailed speech on it and one of his first policy speeches was global warming. But also it is important to recognize that's much more than a political issue, and for Senator Edwards he sees this as something that can't wait after the election and so he has tried to involve people in addressing the climate change issues now. He is running a carbon neutral campaign, he is not the only one I don't think, but he announced that he going to attempt to have a zero emissions political campaign. He has a group of volunteers called One Corps which has held I think two National Days of Action to use energy more efficiently and address global warming issues. And he went to the National Step It Up rallies that were held last month. So it is a very important political issue, but it's also much more than that, it's something that we all need to start addressing now.

Denis McDonough I would just say that I think Senator Obama agrees fully with the Friedman doctrine. I think frankly something that's even more interesting that was written in the popular press in the last couple months was the Sports Illustrated edition that was fully dedicated to this challenge and that the world's largest ski resort in Bolivia will no longer be skiable in the next several years. Mr. Friedman is from Minnesota as am I and when I was home at the holidays there was no ice fishing this year for the first time that I can remember in a long time.

So this is a challenge that is here now, hence the urgency, and for each of those reasons we have to do something about it.

Rick Klein: John, any thoughts? Does Senator McCain see this as a patriotic issue?

John Raidt: Absolutely. I'm at the University of California at San Diego with the venerable Scripts Institution and a lot of the early climate research was done under contract from the Office of Naval Research. This is a national security issue on many angles. We talked about the consequences and I think Tom Friedman has mentioned that as well. But I think the important thing to focus on is that the details matter. What we do and how we do it is going to have consequences and usually they have unintended consequences and so we need to be very careful how we move forward.

I would just say from a Republican perspective too one thing I think we do have to be careful of is the age-old issue of throwing money at the problem. I think Senator McCain's view is that government's role is to set a framework, set standards, and allow the private sector to use its skills and capital flows with innovation to meet it. We have been through six major oil shocks since World War II and I think in recent history the big issue is you have an energy bill and that usually makes a promise to spend a lot of money and here we are in ostensibly the same position that we were at the 1972-1973 oil shock. So we need something that changes it and we've got to stick to our principles.

Rick Klein: Right here in the second row, blue shirt.

Mark Flanagan: Thank you. Mark Flanagan from the State Department. I just had a quick question for the entire panel if you don't mind. France, Europe in particular, but France especially most recently has taken some strong action with new President Sarkozy appointing Alain Juppe as a very powerful new Minister for Sustainable Development basically linking environment, transport, and energy policy. In terms of your administrations, would you look more toward a re-engagement with Europe on climate change issues and what would your administrations think of this type of more concrete action from the federal level? Thanks.

James Kvaal: I think that President Obama, I don't know if he would create a Ministry for Sustainable Development, but there is just no question that this has to be a fundamental part of every agency in the government. This has to be, again sticking to this urgency, something that at the end of the day informs all the decisions that are made at various agencies.

Now I think that at the end of the day also that the North Atlantic Alliance was fundamental to the last several security challenges that threatened us during the 20th century, and into the 21st century this is one of the principal threats. So there is just no question that we ought to be working more closely with our European allies, learning from their mistakes, frankly, but also learning from their successes.

Todd Stern: I would make one comment. Absolutely I think we have to be engaging in a very serious way with our European friends. I don't know that you were specifically asking about whether we ought to be creating a similar kind of agency here, but I just want to comment. I think that the U.S. system the kind of interagency process that done right gets thrown out of the White House can be very effective and was actually a strength for us back in as I recall back from the time that I served with President Clinton and worked on this issue, because we were able to bring together agencies that had an economic focus, that had a science focus, that had a diplomatic focus, and an environmental focus, and have everybody in the room at the right level and hash out and hack out what the policy should be. And I think that I very much recall a perspective being at Kyoto in 1997 and Buenos Aires in 1998 where a lot of the other governments in Europe really had kind of offshored the issue to their environmental agencies, period, without a lot of input from the economic side of the equation, and I thought that wasn't useful. I'm not saying that the Europeans ought to do it the way we do it, they've got their own traditions, but I think if you've got the right kind of leadership, which is to go back to a word I emphasized at the very beginning for Senator Clinton, I think that the right kind of leadership out of the White House can absolutely make our system work and work well.

Rick Klein: Further questions.

John Raidt: I would just say on that issue, too, that classic bureaucratic fights should be a thing of the past. All the oars should be pulling in the same direction where our national interest is involved, and I think with respect to the question from the audience, cooperation is important where it make sense, but I think also competition can do a lot. Again, where we see this as a means of capturing markets and trading the products and the processes and everything that goes with it that the world demands that that can get a lot done too. So we do need cooperation where it makes sense, but let's not forget the competition aspect of it as well.

Shannon Beebe: Shannon Beebe, Department of Defense. I wanted to a little bit to the CNA report and view the environment and climate change through a security paradigm. Conspicuously absent from what we have discussed is what we can do here and now from an engagement standpoint with areas that are most affected by climate change, most affected by environmental shock. A lot of my work deals with Africa and of course the floods over there, the droughts, things like that, when Anthony Zinni was Central Command Commander he had a team that dealt with environmental security as an engagement strategy and his saying was, "I do two things as a commander, engagement in war fighting. If I do engagement right, I don't have to worry about the war fighting." I'm just curious why there hasn't been more discussion of leveraging a dynamic taskforce or partnership not only within DOD but across the interagencies as well as the World Wildlife Fund and some other agencies to go in as a proactive type of a paradigm and in a constructive manner as opposed to an exclusive type of foreign policy and a destructive type of paradigm. I would like your thoughts on that.

James Kvaal: Actually, Senator Edwards is giving a speech tomorrow at the Council on Foreign Relations in New York that addresses a lot of topics, but this is one of them and you may want to check it out.

Rick Klein: No preview?

James Kvaal: Wish I could. I don't do foreign policy.

Rick Klein: We've talked a little bit about this as being a security issue and a defense issue as well. How does it interact do you think?

Todd Stern: I think that in the CNA report as I alluded to earlier, the report talks about climate change being a threat multiplier and part of what it's talking about is precisely the kind of vulnerabilities that the questioner referred to, things like water shortages, things like disease, the vulnerability of countries for example in sub-Saharan Africa is quite dramatic. The way paradoxically or just unfortunately I suppose this issue interacts with the world is that countries that are the poorest and countries that are the most in need are precisely the countries that are at the greatest risk. So I think that an absolutely vital part of the diplomacy, and I think this is going to be very much part of Senator Clinton's approach, is going to be to factor in countries that are at real risk. The reality is we have to talk about in the vernacular of this issue, both mitigation and how to reduce the carbon footprint here and all over the world, and adaptation because there are places where like it or not if we did everything right tomorrow, the climate system is such that there are already built-in problems that aren't going to go away and they're going to get worse and we are going to have to spend real energy both at a human level and a national security level.

There is an interesting article in The Atlantic from April I think that talks about some of the climate underpinnings to the Darfur crisis and these are very real problems, very real national security problems both at a human and national security level and we've got to pay attention to that.

Rick Klein: Questions?

John Raidt: If I can comment on that, Senator McCain has talked quite a bit about the link between security and its nexus of climate and fostering global security which is a direct assault on our national security. General Jones who is the Commander for EUCOM talked about the importance of the interagency in doing what he was doing within his AOR and having not only DOD at the table and the Department of State, the Department of Homeland Security, and Energy, and Commerce and a whole other agency to be working within the AOR as -- to help solve issues, to help be an early alert system to what problems that the locals perceive and try to stop problems before they arise, and I think that's definitely the approach that Senator McCain would be interested in [inaudible] president.

Speaker: Rick, let me just say one thing on this, too.

Rick Klein: Sure.

Speaker: I mean, I think that Senator Obama couldn't agree more with what you said. I mean, you have at the moment -- the OECD did a recent set of case studies where it said that 60 percent of some existing ODA in some countries is at climate risk. So, 60 percent of what we're investing today is not even taking into consideration the likely meteorological impacts of a change of climate. So, be that mitigation or adaptation or simple overseas development assistance, we have to do a much better job of that. So, I think you'll see him calling for exactly that kind of assessment to make sure that at least when we're digging the hole here we stop digging to make sure that we're investing the little researches that we are investing at the moment in in the right way.

And then additionally over that -- that's why he's called for a doubling of the foreign assistance and overseas development assistance accounts so that we can invest in exactly these things so that you don't get into the failed states and the dark corners where some of these very threatening characters lurk and where they plan.

Rick Klein: Right here on the end in the tan blazer.

Darren Samuelson: Hi. Darren Samuelson, reporter from Greenwire. In the 2000 presidential campaign, President Bush said that he supported poor pollutant legislation controlling CO2 emissions from power plants. Although I didn't really question him on it and it really wasn't a campaign issue in 2000, hearing you all today, you're all sounding very similar at least from one Republican and the three top Democratic front runners. How do you make this more than just a teach-in for the American public and actually make this a presidential campaign issue?

Rick Klein: That's a really good question, and I'd add one element. I mean, do we run a danger If the candidates -- if the major party candidates agree on this, do we run the danger of missing an opportunity? I mean, if this isn't a point of distinction between the candidates, will it not become an issue in the presidential race to the degree that people really understand the challenge and what has to be done about it?

Speaker: I think that's one of those good problems. I think if we have, you know, strong commitment, I think the strong commitment you've seen from all the Democrats is really something that's quite exciting and unprecedented, and from some of the Republicans as well, and if we have a general election where the question is how fast and how quickly do you cut carbon emissions, I think that's great.

Rick Klein: But does that -- I mean, to throw it out to the other panelists, does that change the equation in Congress if we have a White House [inaudible]?

Speaker: I think the Republicans should nominate Tom Tancredo.

[Laughter]

Todd Stern: No, I -- you know, I think it's -- I actually think that -- as I said before, I think that a -- that there's really been quite a dramatic move among the public between 2000 and now, which is borne out in the wrong manner of polling, which is borne out by just looking at magazine covers that are on the newsstand every other month, whether it's News Week of Sports Illustrated or Vanity Fair for the third time or -- and obviously the success of Vice President Gore's movie and the likes. I think that this issue is -- has moved way up on the scale.

If you end up -- I mean, if John's candidate, Senator McCain, is a Republican nominee, for example -- I mean, he's got a great record on these issues and if any of our candidates is nominated you're going to have -- you're going to have a lot of agreement, so you're not going to have people fighting so much, but I think it will still be -- I think this is a -- this issue has caught fire in a completely different way than was the case seven years ago and so that it will still be important, but obviously if they're not sparring over it, it will have less juice in that respect.

Speaker: I think Todd's right. I would only say this. I think we -- but I don't think any of us do, but let's not underestimate the difficulty when you get into the details of how this happens. I mean, there is a certain -- and you get -- commerce and industry are coming around. You can -- obviously since 2005 -- that other date that's important in climate history was that since the Senate resolution that passed saying let's have mandatory constraints that don't significantly harm the country - all that is very good stuff, but when we get into the details of exactly what's required and then the special interests on K Street and elsewhere start bubbling up, I expect there will be fights, and we all know this is, again, a very serious economic and environmental business. If this were easy, we'd have done it a long time ago. So, I think there will be plenty of time for dissent -- healthy dissent.

You know, I think some of the skepticism that's expressed by others -- you know, it -- whether it's Tom (inaudible) -- and that's good for the system. I mean, we should be able to answer the hard questions and be able to answer those who still need to be convinced. And, again, the critical massive support within the public, which is the key to getting something passed, is rising. But this is going to be difficult stuff.

Speaker: I would just say that I mean I think that -- I've been in Washington only about 10 years, but I've never seen an issue that the Capitol was so far behind the public on. And it is so evident, and I think each of the candidates hear this when they go out to campaign, they hear it at home, they hear it in letters.

I would just say two things. One is President Sarkozy -- we heard about him before. One of the top three issues he mentioned -- he's the conservative candidate in France. One of the top three issues he mentioned he was going to dedicate his presidency to was climate change.

Second thing is I happen to be in London late last year when Tony Blair gave his last Queen's Day speech, which is where he outlines his plan -- writes [inaudible] plan up in a speech and the Queen delivers it to the Parliament. It was going to be his last and it was his last Queen's Day speech. A tremendous political brouhaha broke out, because the Tories got to the left of Labor on climate. Labor was not setting a hard enough, fast enough, soon enough targets to reduce carbon emissions. I think that's a good thing, so at the end of the day I think that political change where it's hard to tell that on this particular issue the difference between the conservatives and the liberals in many developing economies -- I don't think that that's far from where we are, and I don't think that's a bad thing by any means.

Rick Klein: Yeah, right down the middle.

Charles Trots: I'm Charles Trots. I'm a free-lance economic consultant. Just a few days ago for some of us there was some interesting news, and that is what some of us think might be (inaudible) something like a climate problem, and that is the move by the Administration to have the law to sea ratified. It's only 30-some years since that was, I thought, courageously put together bipartisanly in the 1970s, but it was torpedoed by President Reagan, and nobody had the courage to try to bring it up again except on the periphery. But it's encouraging, because that was the realization that the oceans were common property resource. The atmosphere is also a common property resource, and that battle went through a number of issues. It's not just trying to save the manganese nodules and pay royalties on those, but it had to do with fish stocks. We've lost the (inaudible) in the Grand Banks and the (inaudible) banks. Those stocks are now, some people think, beyond resuscitation.

Do you think that this is a joke? Or is there a really serious attempt, because this would be one way to rally the full international community into a common approach to the climate change problem?

Rick Klein: Any thoughts? I see a couple of signs here. Anyone?

Denis McDonough Senator Luger certainly made this a signature issue. Senator Obama serves on the Foreign Relations Committee. Senator Luger has been pushing this treaty now for several years, and at the end of the day here we -- it's 67 votes, so at the moment I think there's pretty widespread support for it. I don't know if it's got 67, but I think adding the climate change view toward it certainly won't hurt.

Speaker: Just one small comment. I echo what Dennis said and just say as a general matter that any movement in the direction of being able to actually ratify these sometimes quite good treaties that get done internationally would be terrific, and if you -- it could at least serve as a useful precedent [inaudible].

Rick Klein: One last question. Yeah, there on the end.

Chad Dobson: Chad Dobson from OXFAM . It was good to hear about K Street being raised when we talked about the details, and I guess I'm wondering from the panelists how we'd make sure that the forests in this country and abroad are being considered during the transition and as we move forward in this, because they don't have the K Street lawyers and I'm concerned that when we deal with the details they may not have standing that we need.

Rick Klein: [Inaudible].

Todd Stern: First of all, I want to make clear that I did not -- was not for a moment suggesting that there wouldn't be all sorts of fights. I just was suggesting that if the Republicans actually managed to nominate John McCain that there wouldn't be so many fights between the presidential candidates. There's always plenty of fights as these issues go forward.

With respect to the question, though, I think a number of the bills that have been proposed so far, for example, include elements of -- [inaudible] trade bills I'm talking about -- include elements in which some of the permits that would be distributed would be auctioned as well as just divvied up. An auction -- and some of those auction's funds would be -- it would be particularly set aside for people who are hard hit, for people who are poor, and I think that kind of -- Senator Clinton is a cosponsor of a couple of those bills, and I think that -- I think that that kind of orientation and that kind of focus is important here, and it's obviously important abroad.

I mean, the question from DOD raises a similar kind of question. I mean, we cannot -- we will not be successful internationally if this issue is perceived as being in sharp conflict to the needs of development. I mean, there's an enormous number of people around the world who don't even have electricity. I mean, there's a shocking of number of people who live on extraordinarily low amounts and so these issues -- this can be done.

I mean, there -- we don't have to replicate the industrial revolution pass that we took to energy. There are better ways to get energy, but the message can't be you're not going to get it, we do have it or that the way to fix climate change is to keep you down. It's never going to -- it's just not going to work, and it's not the right thing to do, and I think that would be Senator Clinton's orientation.

Rick Klein: Senator [inaudible] says a lot about poverty, but I haven't him talk about this issue as it relates to poverty. What do you think?

Speaker: It is, obviously a central issue for him -- poverty -- not just in the United States but around the world, and I do think that the good news here is that there are substantial resources available to address some of these questions. If we -- you know, if we were to sell the carbon emissions permits, by some estimates that's $50-100 billion a year that's available, and there's a lot we can do with those resources. Some have suggested payroll tax cuts to help low-income people adjust to higher energy prices if there are higher energy prices. You know, some of the -- there's clearly some industries in some areas that are going to feel the transitions more than others, and that's true here in the United States and it's also true in other countries which, seen from the IPCC reports, the impact is disproportionately felt in poor countries, and in some ways we're fortunate to be living where we are. So, there's no question that those distributive questions have to be central as we're designing how [inaudible].

Rick Klein: OK.

Speaker: I would just say that the world's poor don't necessarily have K Street lawyers, but they do have OXFAM , they do have Catholic Relief Service, they do have very aggressive advocates who are looking at exactly this question and have raised it in this context, which is people least responsible for the greenhouse gas stock that's currently in the atmosphere are most vulnerable to the immediate impacts of it and are least able to spend money to mitigate it -- at the end of the day are ultimately going to create a whole series of national security threats not only in their own countries but here. So, it's -- an instance of overlapping national interests here, and I hope that we can get down to work, resolving it.

Rick Klein: John, some final words?

John Raidt: I would say particularly there's costs on both sides. There's the cost of inaction and what global warming does and it affects some of the most vulnerable populations cross the world, and then there's the cost of action -- are you raising the cost of energy? That's what makes this -- you know, you have to be very careful about what we do and how we do it, and I think the great hope is inhibition driven by cap and trade , talking about in telephony countries that never had the money to put in lines for telephones, this technology skipping, going right to sell. It's cheaper, it's easier, and our hope is that the inhibition driven by cap and trade , what America is great at, to develop the types of products and energy sources and ways of using energy that are cheap, economic and have both -- have environmental integrity and that that is something that as a great hope that I think we can afford to.

Rick Klein: Well, good.

Thank you very much to our distinguished panel today. Thanks to Brookings for fostering us. Thank you all for coming. I think this was an illuminating discussion, and we appreciate it. Thank you.

[End of transcript.]

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