Energy Policy:

Daschle, Deutch, Wald, and Zoi discuss national security implications of energy and climate change

As Congress shifts its focus to energy policy and climate change, many in the national security field remain concerned about America's role as a world leader in these to areas. During today's E&ETV Event Coverage of a recent panel discussion sponsored by the Center for American Progress, former Senate Majority Leader Tom Daschle, General Charles Wald (ret.), former director of the CIA John Deutch, and the Alliance for Climate Change’s Cathy Zoi, discuss the national security implications of energy and climate change. They explain how the United States' energy policy will affect other national security issues such as nuclear proliferation and immigration. The panelists also lay out the initial steps they believe should be taken on an international level to address climate change.

Transcript

Tom Daschle: Let me first introduce myself. I'm Tom Daschle. I'm a senior fellow at the Center for American progress and delighted to be here with a very, very distinguished panel. After that stirring speech from Secretary Albright it's certainly appropriate that we would begin our discussion part of the conference by talking about these national security implications of energy and climate change. There was a day, not long ago, when the thought of using the concepts of energy, climate change, and national security in the same sentence was virtually unheard of. Not to mention the subject of a panel discussion on national security with the former director of the CIA and a four-star general. But today things have changed. There is almost a universal appreciation today of the circumstances we face from a national security perspective with regard to climate change. Just last week it was a subject of the G8 discussions. The Congress is now on record in both the House and the Senate expressing the hope that we can better understand these implications. And the director of National Intelligence agrees, and all for good reason. We find ourselves in greater competition for dwindling supplies of fossil fuel with India and China. We're told that more than 250 million people could be displaced over the course of the next four decades directly as a result of climate change. We're told that the implications of change as we look to crop production, especially rice, arguably the most substantial crop in the world today, will diminish by 10 percent with every increase in climate of 1 percent. Nothing struck me more personally than the map I saw in the New York Times a few months ago. It was a map that showed crop production over the course of the next four decades and it indicated that we actually will see wheat crops in Alaska. And that while the state of South Dakota in particular is known as a wheat state with 3.3 million acres of wheat production last year alone, by the year 2050, according to this story, it will be zero. I've always been known as an advocate for South Dakota family farmers, but when they get into the production of tropical fruits and vegetables we're all in trouble. And, of course, as we look to the repercussions internationally one could argue the country that will benefit the most geopolitically is probably Russia, in part because of the price of oil as a result of climate change, in part because their most abundant resource is natural gas, which will continue to increase in value, in part because they'll have additional sea lanes, and in part because their arable productive land will go up dramatically. Given what we witnessed just last week that all ought to give us some pause. As we watched the debate in the Senate about the implications for public policy and immigration we also have to be concerned. Mexico and the Caribbean and all that could happen in terms of the challenges we face with regard to illegal immigration could be compounded and complicated as a result of the desertification of much of that land. So our challenges are extraordinary and the implications for national security are only beginning to be fully appreciated. Here to discuss all of those implications from a public policy perspective, in my view, are three of the most qualified people in the country today. Starting on my immediate left, General Charles Wald was the deputy commander of the European Command, a highly decorated pilot. He was commander of the 9th Air Force as well as Central Command. I now have the good fortune to work with him at the center, at the Bipartisan Policy Center and he's the president of Chuck Wald & Associates. He's one of the co-authors of Climate Change and National Security, a very distinguished report that was just released. To his left, John Deutch, somebody with whom I've had the good fortune to work and know for many, many years; professor, since 1970, at MIT; the Director of Central intelligence from 1995 to '96; before that the deputy secretary of the Department of Defense. To his left Cathy Zoi. Cathy is the CEO of the Alliance for Climate Change, before that the executive director of an organization in Australia that worked on projects worldwide. She's had a magnificent career in government, here in the United States in particular as the chief of staff for the Council on Environmental Quality, was the manager of the EPA, U.S. EPA and the founder of the Energy Star program. She's written extensively, spoken around the world, and we are delighted that she could be with us here today. Let me ask the first question of our panelists, and let me direct it first to John Deutch and General Wald. If we were to fashion a national security strategy, should the U.S. re-orient that strategy today to include energy and climate change? If so, why? And if we should, how would it be done? General Wald?

Charles Wald: Thank you Senator, appreciate it. Pleased to be here and I was impressed with Secretary Albright's speech, I have to tell you. But if you listened to what she said I think she outlined why we have to have, I think, a new policy that looks at the world in a different way. But the reason I'm interested in this, I'm interested as an individual citizen, but as a military professional, in Europe, in 2003, General Jim Jones was the allied commander, NATO commander in Europe, and myself did a review of the strategy of why do we still have 115,000 U.S. troops in Europe and should we continue with that and what's future look like? And in a good way Iraq was good for us because we didn't have any attention paid to us in Europe. It gave us time to do this without any meddling from Washington. But our conclusion was that there is a reason for the United States to be present in Europe, although at a much lower number of troops. And there are threats to Europe that the United States has a common interest in. The 21st century is not just a number that changed all of us, how we look at the world. It is physically a different place and it happened rapidly. I think the United States went through a period at 1990 or 1989, the Berlin Wall fell, where we went from a bipolar world to a unipolar world to a multilateral world in less than a decade. And it happened so fast I think very few of us really recognized it. In post-Cold War the euphemism was let's take a peace dividend. And I think most people in the Western world took a collective sigh of relief and sat back and said, as Francis Fukuyama said, "It's the end of history and let's take advantage of it." Unfortunately, we did not do a lot of work strategically to define what the New World is. The New World has new threats. Terrorism is easy to define from the standpoint of being a threat. It's hard to really define specifically a proliferation of precursor elements for nuclear weapons. This is a problem. We consider that a huge problem in Europe. Energy dependency, energy security is a big problem, as well as failing states. And our definition of the New World was exactly that. And our feeling in Europe was Europe had to cope with that and start doing things of a preventative nature. Now, there are still going to be a need for conventional military capabilities in the future, but there's a huge need for a more sophisticated approach to prevention of problems in the world, soft power if you will, and the military needs to be part of that. Our new strategy needs to be inclusive. We need to be multilateral. We need friends in the world. The problems are too big. One of our areas we worked with was Africa. We had 43 countries in Africa that we were involved with. Africa has huge potential and it has huge challenges. Africa has emerged as a strategic continent in the world and the United States and the rest of the world is going to have to cope with that. We can either sit back and respond under crisis conditions, which is very difficult, or we can start using preventative measures. I think the new world we live in, Senator, is multilateral. It's sophisticated. It's going to require a new approach interagency and new friends in the world. And I'd end by saying that if I could draw out an architectural drawing of what I think our national policy should be it would be, as Secretary Albright said, engaged in the world. It would be looking at new friends. It would be looking at a new alignment of friends. China, India, Brazil, Japan, Australia, South Korea, the European Union all have common interests from the standpoint of economic interest in the world, and stability will be a huge part of that. So, I think now is the time and I'd end by saying the only way this is going to happen, in my belief, in the last four years I've traveled to 75 countries in our area, is with U.S. leadership and there's a yearning for that. Thank you.

Tom Daschle: John Deutch.

John Deutch: Thank you senator. We face really four energy challenges in our national security thinking. The first is dependence on oil and gas. The second is protection of our increasingly fragile infrastructure around the world. The third is nuclear proliferation, and the fourth as global warming. Why must global warming be considered a central part of our foreign and national security policy? The first is that if we do not pay attention to global warming the social and economic consequences for people around the world is going to be extremely severe. If we don't act today we are assuring that those costs are going to fall on people everywhere in the world in an unnecessary fashion, even in South Dakota. The third is global warming is one of the issues that stands between us and our closest allies, especially in Europe. And we must, as Madeleine Albright said in her remarks, work to move together with Europe. And, finally, the most dangerous security aspect of global warming from a foreign policy point of view is that it divides the developed world, the United States and other OECD countries, from the large, rapidly growing, emerging economies, especially China and India. If we are going to deal with global warming, if we are going to take measures that allow us to work with China, rather than to work to get the confrontation with China, we must find ways to move together with China, India, Indonesia, Mexico, and Brazil to manage the global warming problem. It is not enough to say that that has to happen, there has to be specific policy measures put forward to assure that it does happen. One of the matter is I hope we can discuss in this panel are what are the specific policy measures which will bring the large emerging economies together with the United States and others to go forward on combating the risks of climate change? Thank you.

Tom Daschle: Thank you very much John. Let me advise the audience that we will shortly move to questions from the audience, so I hope you'll be thinking of questions that you may ask this distinguished group of panelists this morning. Cathy Zoi, let me ask you, is there an opportunity to motivate Americans in particular on climate change with a further appreciation and an understanding of the implications for national security?

Cathy Zoi: Thanks Senator. Well, the Alliance for Climate Protection is a brand-new organization that I've just taken the reins of. And our central mission is to persuade the American people of the urgency and solvability of the climate crisis. So we've just done some research and it turns out that we have a bit of work to do on the link between climate change and national security. And I'll just tell you that we asked a bunch of questions of people and we asked them how believable do you think this is, how relevant do you think this is, and how likely would this be to cause you to take action? And at the bottom of the list of maybe 25 or 30 messages that we asked about was a question that says, well, it was a statement. "According to our top military strategists climate change is going to become one of the top threats to our national security. A recent Pentagon report stated that climate change is a threat multiplier because of its destabilizing impacts on political systems and extremism. Despite its name, this is not just about the climate, it's about our safety and security." And at the moment it doesn't test well. Now that's OK, because there's a lot that can be done to connect to people. We also found, in the same set of research, that during the course, and again this is a national survey, during the course of the 20 minutes of the survey 35 percent of the people moved up three index points during the course of the survey in terms of their belief in the urgency and solvability of the climate crisis. So the good news there is that the American people are persuadable. The bad news is that they're not there yet. So my organization is aiming to ignite people on all of these issues. Now, the messages that came at the top of the lists, and again, it's a subtle difference, are ones that relate to our over-reliance on oil and gas. So there's a connection to feeling uncomfortable about overdependence, feeling vulnerable to fluctuating gasoline prices, to feeling like American technology is no longer at the lead, that's really fertile ground for right now the link just a little bit further to national security. We have a bit of work to do.

Tom Daschle: Speaking of a lot of work to do, or a bit of work to do, it seems to me we suffer dramatically, and Secretary Albright addressed it this morning, from an image problem. And part of that image problem is driven by our reluctance to be engaged globally on climate change and the national security implications for climate change, not only from a U.S. perspective, but from a global perspective. I'd like to ask all three of our panelists, what would you suggest we do? What are the initial steps, the foundation upon which we could build better global interaction and a strategy internationally? Cathy?

Cathy Zoi: Leadership by example is absolutely first. It has got to be first. I mean during the past few years that I've been participating in international dialogues and I was living in Australia, it is impossible to get anywhere with the Indians and the Chinese and the Brazilians absent the United States taking meaningful, real action to reduce our greenhouse gas emissions here. I mean that's just absolutely the first start.

Charles Wald: I'll just put it from a personal perspective. In the travels I've had, as I mentioned earlier, it was noticeable, and I spent 15 years overseas, and in looking back it felt good when I would meet with senior officials from different countries that they actually deferred to us, in a nice way, for our opinion, the American opinion, and leadership. And I didn't realize that until all the last few years when you'd walk into a room and they would not look you straight in the eye. It was almost as if they felt sorry for America. That's a bad feeling, particularly for a military guy. So I think, first of all, America has to show leadership. In my travels, again, I would ask people in the private civilian world, "What would you like to do most?" And invariably I'd get the answer, "I'd like to go to America." Now, as an American, that makes me feel proud. That is power. That's a powerful thing, the image of America. Unfortunately, our image has been tarnished over the last few years and that power, that subtle power means a lot. So I think the first thing we need to do is join the international community and show leadership. Now, I will just mention real quickly, the senator mentioned a national security study we did on climate change with 11 retired four-star admirals and generals. And our conclusion is you can argue whether it's 90 percent or 100 percent the fact that there's going to be problems with climate change. In the military if you give me a 90 percent problem I'm going to consider it a risk. And smart money tells me that we need to be doing something about climate change from a national security perspective today, not just from the standpoint of how we are perceived internationally, but for our own good. So the first thing I would do is I wouldn't think seriously about climate change, I would do something about it. And then, two, I would do better to join the international community on solving the problem.

Tom Daschle: John Deutch.

John Deutch: Well, I share the view that nothing is possible unless the United States does something. Doing something, I think, means that you have an executive branch that puts forward a disciplined and comprehensive program, which addresses all aspects of climate change. It's not going to be solved by a single piece of legislation. It's got to come from an executive branch, belief in the problem, and genuine policy measures to address it. The second part, and here we're entering a post-Kyoto era, is the challenge about how do you get these large emerging economies to join with you in restraining emissions of the greenhouse gases? And that, I still say, is an extremely big challenge. We cannot solve the problem without encompassing China and India. I remind you that last year China produced, built, operated, deployed about 90 large coal power plants. And neither China nor India or the other large economies are going to stop doing that unless they are given very serious incentives for doing so. So it's not enough to chat among the leadership. Wine and brie parties are not going to solve this. You have to put forward a series of serious measures to give the Chinese and the Indians an incentive to work with you. Absent that we have an unfortunate future ahead of us. So that's where I'm at. We must find those measures and put them forward. The Bush administration has not done so and we have to have serious measures on the table if we're going to have them join us.

Tom Daschle: Let me pick up on that. As we find ways to reduce our dependence on fossil fuel and reduce overall carbon into the atmosphere, dealing with greenhouse gases in particular, some eminent scientists like James Lovelock have suggested that the only short-term solution is an increased reliance on nuclear. There are a lot of national security implications regarding our increased reliance on nuclear, including, of course, the proliferation of nuclear material worldwide in countries like Iran. How should we look at nuclear power today? Is it partly a response and what are the national security implications of greater reliance today?

John Deutch: Senator, nobody can be more favorably disposed to responsible nuclear power than I am. But if you take an optimistic view about how much nuclear could expand around the globe you might have a tripling of the number of power plants around the world, to the level of 1000 throughout the world from 300 today. That, frankly speaking, does not change the global warming problem almost at all. It is a very small percentage substitution for the greenhouse gas emissions, even if every one of those nuclear plants were to substitute for a coal plant. So, while nuclear makes an important contribution, by itself it is insufficient to really cause much less a reduction, cause a flattening of greenhouse gas emissions. So, it has a role to play. It has to be managed properly because many of those plans will be in parts of the world which are less stable than Europe or the United States. But it is not going to solve the problem by itself. In the very long run nuclear is also important because it gives the prospect of electricity as a source of transportation, whether it's mass transit or electric cars, that would substitute for petroleum use. But that's very much in the long run. In the short run we have to deal with greenhouse gas emissions, including the assumption of greater deployment of nuclear.

Tom Daschle: Any other comment?

Charles Wald: I agree. First of all, I agree that it's not the only solution, but it's going to have to be part of the solution. The issue is, I think what you alluded to is what you do about the nuclear used fuel or the precursor elements? That's a huge issue. And as I mentioned earlier, our concern in Europe, and I think globally, is extremists that get ahold of some either precursor element or an actual weapon. And I was interested to see that the director of the FBI, yesterday, Bob Mueller, mentioned that he is convinced that we're going to have a nuclear attack on America or someplace in the world in the not-too-distant future. Now, that's a pretty significant statement by the head of the FBI. So, I think your point that we have to do - first of all, it's inevitable, we're going to have to diversify our energy sources. And it's not just nuclear. It's going to be renewables. It'll be more efficiency in our vehicles and alternate fuels. That's important. And it's important for us to get off this dependency of energy, imported energy. Only one of the top 10 holders of reserves in the world is a private firm and that's Exxon. The other nine holders of the most reserves of energy in the world are all nationally owned companies. Most of them are in unstable countries or in countries that don't like us very much. We're being manipulated because of our dependency on energy. So, that's just security. And then you talk about climate change, this is a very elegant solution here. By solving our energy dependency you solve the security problem, and you solve the climate change problem at the same time. So whether you're an energy security buff or you're in environmental buff, everybody gets satisfied. This is a perfect time in the world for that. But more importantly, I think this nuclear side, I think one of the most brilliant pieces of legislation from this national security standpoint has been the Nunn-Lugar Act and what they've done to try to at least eliminate some of the former Soviet Union and Russian nuclear weapons. And recently, the Proliferation Security Initiative is another good initiative, but it's not enough and they're somewhat unilateral. I think those have to be expanded and we have to work extremely hard to figure a way to help others. And in this case potentially through technological transfer or whatever else to do a much better job of securing either used or precursor elements for nuclear energy.

Tom Daschle: Thank you. Cathy?

Cathy Zoi: I guess I come to this climate change issue, it's really a mobilization and transition challenge. It's not a technology challenge. There's a variety of technologies that are going to help us solve this. And if you look at it as an economist, there's a cost curve and there's certain things that, frankly, we should have been doing for the past 20 years, like energy efficiency, which we haven't got off our bottoms to do very well, which according to the International Energy Agency can give us up to 80 percent of what we need. Now, I don't know if that's a little bit too rose colored glasses, but let's have it and save 40 percent of the solution is just going to come from improving the lights in this room and the widgets that are plugged in. And then you march up the curve and nuclear is somewhere on the curve, that cost curve. When you actually account for the insurance, the disposal, and everything else it's probably maybe equivalent to coal with carbon capture and storage, maybe, something along those lines. Essentially what we need, and what we need in all participating countries, is to have carbon be priced somehow. And I don't care whether it's a cap and trade or a cap auction and trade or a carbon tax, whatever is politically palatable for whatever nation in the world decides to play this game. But I moved back from Australia and I live in the heart of Silicon Valley and those guys are jamming on finding solutions, if the price is right. Everything that I've ever been involved in and I was trained as a geologist many, many years ago and then as an engineer. Everything I've ever been involved with, the engineers and the technologists have been able - they say, "Bring the problem on. We'll figure out how to do this." But they can only go so far if there's not policy to support that. So nuclear may or may not be part of the solution. I don't know, but I think right now it's, frankly, much more expensive than the other things. I'm a little worried about it being a red herring of a political debate, because it's so charged. So we'll all, I mean this is John's worry too I think. We'll get into this big yes-no debate about nuclear, when it in and of itself can't solve the problem.

John Deutch: Well, bravo. I mean bravo. I think that this is exactly right. If we were serious about this we would have a carbon tax around $30 per ton for all emitted forms of carbon. So I'd like ask you a question Senator. What are the political ...

Tom Daschle: Wait a minute, wait a minute.

John Deutch: What are the political prospects of such a significant tax, which will have the effect of reducing demand for electricity, shifting to noncarbon sources, and, incidentally, encouraging new technology? That's what's needed. What are the prospects?

Tom Daschle: I'd say the prospects improve and, obviously, the next president is going to have a lot to say about what kind of an agenda we have. I've found increasing interest in both cap and trade, as well as carbon tax as I've traveled the country. I think the politicians are missing it if they don't fully appreciate what a dramatic difference there is in the electorate today. People are concerned about this, and if it's a dedicated tax they're prepared to support far more than most politicians give them credit for today. We're not there yet, but with some leadership and more opportunities for dialogue like this I'd support you for the United States Senate John if you had some kind of a platform. Yes, absolutely.

Charles Wald: First of all, I think the senator has got it exactly right. But I will say one thing, in the discussion now we kind of defaulted back to a domestic approach.

Tom Daschle: Yeah.

Charles Wald: And the fact of the matter is we don't control this in the world as much as we think we do anymore. I mean the world has figured out there's money to be made in a cap and trade system. There's money to be made in green, being green. Whether you like that or not they figured it out. We were in London not too long ago with a group called The Climate Group, the major corporations in England. They are concerned about climate, no doubt about it. But they're also concerned about the other part of green, that's money. And they're going to make a lot of money on this. Now I agree, nuclear energy is expensive, but when it becomes an international economic issue people are going to default to where the money is. And it's more than just money, but we need to realize that our influence on changing this debate in the world has diminished significantly. And we need to start figuring out what's best for America.

Tom Daschle: Let's open it up to questions from the floor. Question over here, yes? We have microphones. If you wouldn't mind, identify yourself and then ask the question.

Charlie Brown: Charlie Brown, Citizens for Global Solutions. Until this very last round of discussions I was struck by the fact we seem to be focused much more on the ends rather than the means. That is to say, on the issue of climate rather than the issue of energy. And I've also been struck by the fact that none of the panelists, and I would say to their credit, have raised the issue of energy independence and what that - that the debate on energy independence is going on Senator. And we argue that energy independence is actually an argument for energy isolationism. And to go to General Wald's point that we can't solve these problems on our own, that we have to work with the rest of the world. So I'd just like a comment on the debate on energy independence and how we move this energy solution to the climate change solution.

Tom Daschle: Who wants to take that?

Charles Wald: I will. I think energy independence would be the worst thing that could happen to America personally, ironically. It seems very appealing to say we don't have to listen to anybody. We're on our own. Hey, listen we're in a global world, a global economy. If we're the only ones that use a certain type of energy in the world it's not going to help us one bit, even if we wanted to. Number two is I think what was mentioned earlier, it is almost impossible to get there. We use 88 million barrels of oil a day, most of it in the transportation fleet, 60 percent of it, and 97 percent of our vehicles use fossil fuel. We have 220 million cars or vehicles in America. To switch over is going to be significant. It's going to take time as Secretary Deutch mentioned. And so I think we should become less dependent. I would like us to be less dependent. It's interesting, today we import more oil from Africa today than we do the Middle East. And by 2015 we're going to import 40 percent of our crude oil from Africa. I think when you start speaking in those terms, what the reality of the world is, what I think we need to do is exactly what's been pointed out a little bit. But we need to diversify significantly. We need to do it now. And it's going to take us probably a couple decades at least to get to the point where we're even less dependent than we are today. If we were to do fuel-efficiency in our vehicles today, CAFE is what it's euphemistically called, by 2025 we could reduce imports by 4 1/2 million barrels. If we do alternative fuels, if we do some renewables, we could probably get down to imports of maybe 6 million barrels a day by 2025. That's with a massive governmental regulatory effort. We import 12 million today. We're still going to have to import 6 million. If we did all those things, by 2025, we would still use as much fuel or oil as we do today. So it's a huge, massive problem that sounds good on paper, but is unrealistic. So it's a global world and we need to face up to that.

John Deutch: Well, I share the view that energy independence is not a constructive idea. The first reason is that we are going to remain dependent on energy imports and, most importantly, our allies are going to remain dependent on energy imports. And to bring it back to national security, a great deal of that oil is going to come from the most unstable part of the world, which is the Persian Gulf, from Kuwait, Saudi Arabia, Iran and Iraq. All the projections from the International Energy Agency, from our own Energy Information Administration shows that production from the Persian Gulf will become progressively more important, at least over the next three decades. That has absolute national security consequences for how we think about our foreign relationships with these countries, but also how we deploy our military forces even in a happy world which does not involve us in Iraq. So, the dependence on oil is a reality and our problem is to manage it over the decades that it's going to take to get away from fossil fuel dependence. I come back to the suggestion of a very significant carbon charge because it will introduce alternatives such as fuels from biomass where you could have 2 or 3 million barrels of oil per day in the next couple of decades, an important contribution. But the fact is energy, oil and gas dependence remains and talking about energy independence is not constructive, in my judgment.

Tom Daschle: Another question? Yes? There's a microphone coming your way and if you'll just identify yourself, that'd be great.

Drew Clybreak: I'm Drew Clybreak. Approximately 40% of our energy consumption is not in transportation, but in buildings. There's very little discussion on the national level about that. There's about 1.2 million new homes built a year, mobile homes and commercial buildings. And it seems to me absolutely tragic that a piece of capital, which is what a building is, is being built that's lasting 40, 60, 70, 80 years. And the technologies exist today on heating and cooling, on the thermal envelope that aren't being used, that aren't being adopted, that we're, as a nation, making such crazy decisions in the building sector. And I would think that through tax incentives and through some other things that we can change that. But also the market has to be pulled by the consumer. When people go into a home they need to go and ask what the building efficiency is and how much it's going to cost to heat and cool it. And ask the builder to build the building so that it costs them as minimal as possible over a period of time. It's both good for them economically, it's good in terms of national security, and it certainly is good in terms of the environment. And Cathy, I'd like you to address that.

Cathy Zoi: Well, I couldn't agree with you more. It's interesting, California has these amazing, compelling statistics that over the past what, I think 15, 20 years maybe, the economy has grown 60 percent and energy consumption hasn't. Or maybe it was the population has grown 60 percent, but the energy consumption hasn't. In California they have successfully decoupled economic growth from energy growth. First place ever to do that. It is possible to do it and one of the reasons that California was able to do it is the heavy investment in energy efficiency. And the investment wasn't necessarily dollars. I mean some of it was utility rebate programs and things, but it was a regulation of buildings. They had Title 24, which meant every new building had to have the stuff that makes sense to have. It meant that utilities no longer make more money if they sell more kilowatt hours. They make more money if they sell a bit less. Their shareholders are happy because there is a very innovative regulatory scheme, but that sort of program needs to happen nationally. And it is within our grasp to be able to do that. And it needs to be done not just in United States. It needs to be done globally. When I've done work in India, again, huge growing energy appetites. Their demand management programs, I was working with a smart metering company, because smart metering is a way to make energy efficiency happen quite easily. Anyway, I said to this fellow, "Look, we'd like to put these smart meters so that you can reduce energy demand." And he said, "Oh, well, our demand management program is we turn everybody off on Tuesdays." I mean that's what they have to do, because they have demand that's outstripping supply. Well, actually if you just used a better combination of technologies you wouldn't have to turn off half of Mumbai on Tuesday afternoons. So I agree with you, the question is how to make it happen not just here, but in places like India as well because while they need to build another coal plant every month, shoot, it's pretty darn inefficient when you're sitting in those office buildings in Delhi right now.

Tom Daschle: Just to add to that, the numbers, I was in California recently at a conference and I was told that per capita consumption in the United States today is around 11,200 kilowatts per person. And Californians today, as a result of the actions Cathy just described, around 6700 kilowatts, dramatically below the national average. There's a question over here.

Tom Kalina: Tom Kalina, 20/20 Vision. Thank you all for being here. We work on security implications of both oil dependency and climate change. And, luckily, as has been said, the solutions to these things are often harmonious and in sync with each other. Sometimes they're not. So, my question to you is if there's something that helps us on oil dependency, but hurts us on climate, how do we balance these things? And there are a number of examples. The one I'll put out is turning coal into liquid fuel, helps us on oil imports, hurts us on climate, how would you balance those things? How do you see the national security balance play out there?

Tom Daschle: General Wald?

Charles Wald: That's a huge issue and I think it needs to be addressed immediately from a standpoint of what we're going to do. I was in the Senate testifying not too long ago and the question was bought up by one of the senators, why don't we just transfer clean coal technology to China? That will help us. It was a great question, but the answer was a very good the answer was, yes, we should do that. The problem is we don't have clean coal technology. So, I think what we need to do, first of all, it's very appealing for the U.S. military, and, by the way, I'm a big believer in the U.S. military, don't get me wrong. I haven't gone soft on that. But to have an alternate fuel in case we get cut off. You know there's the Strategic Petroleum Reserve, etc. But it goes back to the independence question again. I think many people wish we could get away from this dependency on people that don't necessarily like us or have leverage on influencing our foreign policy, particularly the capability of our military to respond. So, coal becomes very appealing. We have more coal than you can ever imagine. In the United States, I think we have something like 250 years worth of energy of coal. The problem with coal is it's dirty as heck when you burn it. The United States Air Force recently has flown an airplane with liquid coal. That sounds pretty interesting. Well, the Germans did it in World War II, so it's not new technology and South Africa has been using it for years. The problem with it is though is, as was mentioned by Cathy, how do you sequester the carbon and how do you make that economically viable? And I think, as a national program, the United States Department of Defense in conjunction with the Department of Energy and Industry needs to have a massive program for developing IGCC and sequestration and clean coal technology as an alternative. And that should be done immediately. And until then, I don't think we should sanction in the coal-to-liquid plants, frankly.

Tom Daschle: John?

John Deutch: Well, the first is I believe that coal-to-liquids, in the United States and elsewhere, should only be pursued if it's accompanied by carbon capture and sequestration of the CO2 produced in the manufacturing of the liquids from coal. I regret to say that some of the measures under consideration on Capitol Hill don't make that required linkage between liquids from coal and carbon captured sequestration for those plants. And, unfortunately here Senator, I'm an old guy, so I was there when the Carter administration, in the Department of Energy when we worked on synthetic fuels, not entirely successfully from the commercial point of view, but certainly from the technological point of view it is something that should be given attention to. A barrel of oil equivalent from coal is a much more expensive commodity currently compared to even the high prices of oil we have today. So, if you go to China and talk to them about liquids from coal, China has enormous, enormous reserves of coal. They're tremendously interested, but the prices really have to come down before that technology gets exploited. But with carbon capture and sequestration, liquids from oil sands or from coal will eventually find their way into the marketplace as prices rise. And provided that one captures the CO2 and knows how to sequester it, we should be encouraging that.

Tom Daschle: Another question? Or Cathy did you have anything to add?

Cathy Zoi: Just quickly, I mean I agree with what these guys have said. Again, at the risk of sounding like a broken record, there's things that you do first, like make every car that's on the roads going forward as efficient as the hybrids that we can get now. And that's a lot simpler and it's a lot cheaper and, yeah, I know that there are political issues with that, but that's what we should be investing our political capital in, is improving the efficiency of what we drive. And I bet, I think if you do the numbers that will have more impact than some modest coal-to-liquids plant.

Tom Daschle: Yes, please.

Charles Wald: Secretary Deutch reminded me of something and it's somewhat related, but from a security standpoint it's interesting that in 1980, then-President Carter actually articulated the Carter Doctrine publicly. I think it's the last time I've heard a national doctrine articulated like he did. But one of the issues President Carter brought up was that the free flow of oil in the Middle East, in the Persian Gulf, was of vital interest to the United States. And he publicly articulated we would use military force to ensure that free flow of oil. Now, if we said that today we wouldn't look very good in the world, although I think there's some truth to it. But the GAO did a study, and since 1980 we've spent between $50 and $60 billion maintaining a military capability in the Middle East, in the Persian Gulf particularly, not counting the Iraq war number one or two. And if you look at that, first of all, nobody else in the world is doing that. I mean it's the dial 1-800-USNAVY syndrome I would put it. Two is if you really look at what we're paying for a gallon of gasoline in the United States and if you use that number, it's about $7 to $8 a gallon minimum today. So just from that standpoint alone we need to do something. Now the beauty of it, again, is that if you solve this problem, it's an elegant solution. You get the national security, you get economic benefit, and you solve climate. So, we've just got to jump on it today.

Tom Daschle: A lot of motivation.

John Deutch: General, I just would like to observe that even if we didn't take one barrel of oil out of the Middle East, there would still be an American interest for being there and for having a strong presence in the Central Command region. And the history will show there are many reasons why we wanted to be in that region, not least of all because of originally a Soviet threat, but today because of nuclear weapons ambitions of Iran. So while I think it is true that our military deployments there, in some sense, are connected to our energy interests, I don't think it's exclusively the case. And I think it's unfortunate to give the American people the impression that if we had no oil imports, as unrealistic as that is, that we would not need to have significant military presence and programs available if necessary in the Persian Gulf in the Middle East region.

Charles Wald: I think a certain extent you're right. You are right. I think it's going to be hard to go back and reconstruct history. But it would have been a lot different if there weren't oil coming from the Middle East since 1980. Now, Israel obviously, to most of us, is very important and stability to that region, but I think it's going to be hard to - when history shows how much presence we've had there, much of it has been because of this dependency.

Tom Daschle: I would agree with that. John, did you have a question?

Question: Just one point of clarification on the liquid coal and then I want to ask John a question because he raised Iran again. Even with carbon capture and sequestration in the production cycle, liquid coal produces more CO2 than conventional gasoline.

John Deutch: Correct.

Question: So until you put a price on carbon and think about the cost of carbon capture and sequestration and the cost of carbon, I think the prospects for liquid coal, other than through government largess, are pretty slim and don't do much about the climate change problem. I wanted to come back because you raised Iran again, on what you think is happening there now, whether there's any prospect through diplomatic efforts to derail the Iranian nuclear program and where you see the debate around either restructuring or strengthening of the Nuclear Non-Proliferation Treaty going.

John Deutch: Well, John, let me say, it goes back to the question we had over here. Sometimes, always, our different foreign-policy objectives conflict and have to be managed. There couldn't be a better example than Iran where we have these three tremendously important interests. One is they are producing and offering on the world markets 3 million barrels of oil a day, which is significant and projected to go up. Two, we have this overriding concern to make sure that they don't proceed with their program to acquire a nuclear weapon. And number three, we would like them to be helpful as opposed to interfering in Iraq. And so we have to manage all three of those things. There are two ways I'll answer your question. The first is I would turn to Sandy Berger and get his advice on how to do it rather than take mine. That would be a better way to go. But I will tell you, I think the United States is very likely to have to face a stark choice in its dealing with Iran. I think we should be speaking with them a lot more, discussing with them ways to resolve our differences. And in the course of doing that we're not going to win all parts of that argument. We are going to have to have some very, very great concessions if we are going into a more civil relationship with Iran, which I think is absolutely essential and certainly our European allies want us to see. But the balance between those three objectives is extremely important. And I'm not supposed to say this, it drives my friends nuts, but stopping the Iranian nuclear program is going to be very hard to do indeed. It's a worthy goal, but it isn't going to be easy to achieve.

Question: Could I just ask somewhat of a provocative question along those lines, because here we've talked about the need for the United States to possibly expand our nuclear capacity for energy purposes. Europe is doing that and will continue to do it. China is doing it. Are we not in a position of looking quite hypocritical by saying we're going to do it? We're going to expand our capacity. China is going to expand it. But you, countries that we don't like or for whatever reasons are causing us concern, we're not going to let you do it. How do we get away with that internationally?

John Deutch: I don't think that's a fair characterization of what has been actually probably the only kind of bipartisan position that the U.S. administration has taken, both the Clinton and Bush administration. I think there's been a real effort to work within the G8 to offer quite attractive terms to the new emerging countries who will be using nuclear power, who would like to use nuclear power in exchange for nuclear supplier states, whether it's Russia, the United States, or France getting quite attractive guarantees in support on the front end of the fuel cycle, that is through enrichment services and especially on the backend of the fuel cycle to avoid reprocessing. I think that that policy initiative has been really quite general and the United States has been, in both administrations, quite firmly behind it. The trouble is we don't have any good examples. We could have perhaps reached some sort of an arrangement in Iran. It didn't happen over the Bashir reactors. It didn't happen because of their enrichment program. We took, I think, a wrong step with Brazil in permitting them to have an enrichment program. And the U.S.-India deal has both pluses and minuses in that regard. But in general the G8, the United States and the other leading world countries, I think, have been responsible and correct in saying, yes, new emerging countries can have nuclear power, but let's do it in a way that minimizes proliferation risks. And I think we should all be behind that.

Tom Daschle: There's a question over here. Yes?

Sara Mencheske: Hi, Sara Mencheske at the Center for Naval Analysis, where I work on an energy program called The Energy Conversation, a program that's funded by the Department of Defense. We hash out kind of all of the issues that have been brought up here in the Q&A portion, and you're all invited to come. My question is about the Montreal protocol which a recent report says has done more to curb greenhouse gases and address global warming than any other international policy. Do you think that that's a good foundation to move forward from as we move kind of into post-Kyoto talks? Have there been any people talking about what's worked out of the Montreal protocol and what hasn't worked? Thanks.

Charles Wald: I'll just make one real quick comment and it has the fluorocarbons I guess. But to me the difference between that and Kyoto really is the decision by the United States to participate. And when you say regulation in America a lot of people got real nervous. But, you know, we regulated refrigerators and sometimes you've just got to do it. And I think the best part of that model is everybody participated in it and it wasn't kind of a voluntary program. It was regulatory and everybody agreed and it worked. And I think the same thing's going to have to happen with carbon capture in the next -- it won't be called Kyoto. I'll guarantee you it will be called something else, but it will be coming. And, frankly, when Kyoto first came out I was glad that we didn't necessarily participate because I don't think China and India are emerging. They've emerged. So they're going to have to play too, but yeah.

John Deutch: Well, the Montreal protocol has been successful. But I think it's dangerous to take that as a model for carbon emissions. There are two reasons for that, first of all, there were easily available alternative chemicals that could be used for refrigerants that did not cost that much more money. If you were to do something similar with carbon emissions, that is have a very strict protocol that says everybody reduce by this percentage every year, you have the issue about what are the size of the costs that it takes to make those adjustments and who's going to bear those costs? And they are much, much higher. Remember, a coal plant with carbon captured sequestration, for the consumer, might mean electricity which is 20 or 25 percent higher, just paying the costs of the additional need to do the carbon captured sequestration. That's a very, very big, big number, especially for a country, an emerging country like India or China. And I will use emerging because there are so many people in China and India who have no electricity and they want to have electricity. It is an indicator of social and economic development. So it's a much bigger bill to pay. And I don't think it's a good model about how we would have to handle it.

Tom Daschle: Bill Homburg.

Bill Homburg: Thank you senator. The greatest carbon potential, the greatest potential carbon sinks in the world are the oceans, the soil, and biomass. How do we seriously take advantage of these potentials?

Cathy Zoi: I think if we had a price on carbon then we would probably get directed investment in the variety of solutions. I mean getting that could happen and happen reliably is going to require some more investment. Is that not so? So, what we need is that investment to be directed appropriately and, again, absent the political will and the financial framework underpinning that, then I don't think that we're necessarily going to be able to tap into that vast amount of potential resource.

Tom Daschle: There's a question over here.

Paul Marino: Hi, hey congressman. This is Paul Marino with EAR and I have a question for you on strategic policy. At the G8 this weekend President Putin has offered to the United States to build the Bering Straits Tunnel project. And he sees that we in the United States can work with him on great projects for industrial development. And then going beyond that, they have a plan to build floating nuclear power plants for fresh water desalinization. General Wald, yeah, I agree that global warming is a huge threat. Now, every day there's this very hot fiery mass that causes lots of global warming and it's called the sun. So, do you think we should bomb the sun? Mr. Deutsch, a question for you. You asked for us to do something. I think that we should listen to Putin and go back to FDR's model exactly, but also first think about Cerberus and the recent takeover at Chrysler. For those of you who are not familiar with Greek history, Cerberus is the name of the three-headed the hound that guards the gates of Hades. So, for some strange reason, some friends in our financial community have decided to name their financial entity that while they gobble up the last of U.S. industry. So, perhaps you can address that. And then lastly, Cathy, in your survey on global warming did you ask people if they thought that global warming was true? And what are the scientific studies and so forth that validate this? Because most people don't know that Al Gore is a hedge fund manager and a lot of the intentions here are to remove U.S. industry by taxing an industrial base into the Stone Age. So thank you.

Charles Wald: Well, I'll start since you started with me. I think, in all seriousness, that strategic doesn't mean that you agree with everything with the person that you're negotiating with or operating with. And I think we've fallen into a trap where we think if somebody doesn't agree with us and what we do in our country that we aren't going to have a relationship with them. And there's been plenty of good examples in the past where strategic relationships have been made where we don't totally agree in principle on everything, but on some of the most serious things we do. And I think I'm disappointed a little bit with President Putin, some of the things he's done. But I think we should have continued to work with Russia as a strategic partner over the last years. And I think his offer to participate in the MDA is really excellent, and with Azerbaijan particularly. Now, does that mean that I agree with everything that Russia is doing? No, not a bit. As a matter of fact, I don't agree with a lot of countries around the world, with what they're doing. But we should make strategic partnerships where they make sense on things that make sense with us, and not necessarily things that we're only going to negotiate from a total position of advantage all the time. And no I don't think we ought to bomb the sun.

Cathy Zoi: With respect to where the public opinion is on climate change, thankfully, Americans now are in widespread agreement that the science is completely irrefutable and it's there and they are persuaded that, indeed, climate change is happening and that human beings are causing it, because the evidence is just, again unfortunately, so abundant and mounting. What they are not necessarily persuaded of yet is the urgency and solvability of it and so that's what the Alliance for Climbing Protection is going to be spending time on.

Tom Daschle: Question right here. Yes? There's a microphone coming.

Sue Thistlethwaite: My question is about the rhetoric of adaptation, which I hear increasing, especially in the public. And it seems to me, as a non-technical observer, that the idea that we now need to adapt to the effects of global warming is designed to derail the kind of rising consciousness that you're discussing. And so I wondered what your opinions were about the rhetoric of adaptation and whether there were then national security implications or whether, in fact, adaptation is a part of a complex response that has national security implications. I'm Sue Thistlethwaite. I'm president of Chicago Theological Seminary. And if you'd like to talk to me about Hades afterwards I'd be happy to do so. Thank you.

Tom Daschle: General Wald.

Charles Wald: We looked at that as an issue during the Military Advisory Board study to the Center for Naval Analysis. And this is what we believe, is in a way adaptation is giving up, I mean if you think that's the only answer. But, frankly, we're going to have to mitigate and probably adapt both because global warming is somewhat of a natural occurrence and the climate change problems are multiplied by man-induced issues. So we're going to have to prepare for adaptation and think about that in a strategic way. But the first thing we ought to be doing is mitigating now.

Cathy Zoi: I agree with that. I think it depends on where the discourse is happening. In General Wald's world I think the adaptation discussion needs to happen. And, frankly, there are already places where adaptation is needing to take place. However, when we're trying to engage the public so that they take action in their own lives and they become politically active on the issue the discourse that we are really engaged with them on is the solvability, the solutions that surround them in their daily lives, that are in their electricity system, that are in their cars, and the policies that they can actually say to their elected officials, "I want you to put this in place, because darn it, I want to have access to a hybrid car," or whatever it is. And that's very much about mitigation so that we reduce our emissions.

Charles Wald: I'll just add really quickly, that if we don't mitigate there's not enough adaptation to be done in the long run.

John Deutch: Well, we're not making progress on the issues, so I think it behooves us to think about what happens if we don't mitigate. We aren't making progress. We're certainly not making progress internationally. So, thinking about the consequences of adaptation, as unpleasant as it is, is something that should be done. But even more worrisome than that are the proposals for geoengineering solutions, which is a little bit different than adaptation. That says human beings will actually try and titrate the atmosphere to undo the effects of global warming. So one of the ways of focusing the attention of the public and of our political leadership about the need to mitigate is to clearly show what adaptation, so called, and geoengineering solutions really mean. So I think, first of all, it's necessary because we're not making progress. And, secondly, maybe it will help cause some progress.

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