Climate:

CCAP's Helme previews Poznan meeting, discusses impact of Obama election

As the international community meets in Poznan, Poland, for this year's U.N. Framework Convention on Climate Change (UNFCCC) summit, the incoming U.S. presidential administration is bracing for a challenging year ahead on the international and domestic climate policy fronts. What are the expectations for the Poznan meeting? How will this year's summit set the stage for the 2009 UNFCCC summit in Copenhagen, Denmark? What does President-elect Barack Obama need to do ahead of the Copenhagen negotiations? During today's OnPoint, Ned Helme, president of the Center for Clean Air Policy, previews the Poznan meeting and discusses expectations for the Obama administration for international climate negotiations.

Transcript

Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. With us today is Ned Helme, president of the Center for Clean-Air Policy. Ned, thanks for coming on the show.

Ned Helme: My pleasure, Monica.

Monica Trauzzi: Ned, the international community is meeting in Poznan, Poland for the UNFCCC annual climate meeting this month. Considering the change in administrations in the U.S., what are your expectations for this meeting? Is it largely a formality or are we going to see movement on certain issues?

Ned Helme: I think we'll see movement. I mean we're in a two-year process and this is the end of the first year. We're laying the groundwork for the serious negotiations that proceed next year. I would say we'll probably see some movement on deforestation issues. I think we'll see movement on adaptation issues, some things on technology; basically some of the lesser issues away from the big issue of what is China's target? What is the United States target? I think delegates recognize that this is no time to be talking about what the U.S. target is. So I think we'll see some movement on key issues that lay the groundwork for the real heavy lifting next year.

Monica Trauzzi: So, the U.S.'s role in this meeting is not moot because the change of administrations is happening in four weeks. There still will be a place for the U.S. to participate in the dialogue?

Ned Helme: Absolutely, but I think their role will be relatively minor. I mean we're talking about some issues that aren't big U.S. issues in a way. And given it's a lame-duck team Obama's team can't be the negotiators, it's got to be the Bush administration's team. So, I think they'll be in the background and I think Mr. Obama has indicated he's going to send a senator as opposed to sending any representatives so that it's more of a gathering information at this point process for them I think.

Monica Trauzzi: You just got back from Europe. You're about to head to the UNFCCC meeting, what have you been hearing from international climate negotiators about the Obama election and what that's going to mean for climate negotiations?

Ned Helme: A lot of excitement, a lot of excitement. I mean if Europeans in developing countries could have voted it would have been 95 percent for Obama and of these delegates absolutely 100 percent. So I think a very positive sense of where things are going and I think the President-elect made a great move last week. He hooked up, you know, in California on a video deal with Schwarzenegger, Governor Schwarzenegger, and there were 10 key developing countries in the room. He said clearly, "I am committed to 1990 levels by 2020 in the U.S. This is a priority even though we are faced with this financial crisis." That had huge reverberations. I was in Europe; I was in the prime minister's office in Britain on Wednesday. They are excited. I mean this is big expectations. It sets a high bar, but I think it's very positive for the negotiations.

Monica Trauzzi: Yes, so the expectations are so high, what does he need to do during his first year in office heading into the 2009 Copenhagen meeting? What does he need to do to set the U.S. up in a place that's appropriate for that meeting?

Ned Helme: I think the key is to put that legislative package on the table, maybe March, April, and if he sticks to what he said on Tuesday in California, 1990 levels by 2020, economy-wide cap and trade, that's great. Get that started. Get the Senate and the House moving on it, maybe get one house to have adopted it by the time we get to Copenhagen. That lays the groundwork, because, you know, when you think about it, they say, well, we can't have our whole bill though.

Monica Trauzzi: Right.

Ned Helme: Well, that's not the issue. The issue is what is the U.S. target? And if we know the U.S. target is fairly substantial, that really frees the negotiations to go forward. If it's murky, then we got trouble, because everybody is sort of looking and saying I'll do this much if they do this much. And so I think that's the key. But I think we're in good shape. I mean Mr. Waxman has taken over the committee in the House. I mean I think we're going to see a pretty tough bill that will be significant in terms of the international discussions.

Monica Trauzzi: OK and I want to focus on what some congressmen have been saying recently. Senator Bingaman recently expressed some concern about the viability of carbon offsets. The clean development mechanism has also faced a lot of criticism. Is there a way to guarantee high-quality, viable offsets both domestically and internationally? I mean there are people who aren't even sure that these are helping to reduce emissions and that seems like a key piece of the puzzle as we head into 2009.

Ned Helme: Well, you know, I'm a naysayer on this argument. I think that the CDM has done a pretty good job. I think the executive board, it's had its difficulties in terms of the volume of decisions they've had to make, but I think the baselines, the decisions have been pretty good in terms of the credibility. I think we get a bad press here in the United States on the CDM. I think it's not nearly as weak as you might hear. Now, there are some cases, there are some situations where it's not so strong, but in general I think it's done a good job and I think it's a good direction to follow. But I would say a key in the U.S. is to get to -80, we want as many sectors and as many players in the tent with requirements for reductions. So my view is we ought to have less offsets domestically and more players in the tent. Example, we've done a lot of work in California, we've urged Governor Schwarzenegger to include the forestry industry in the cap, not just say you can make reductions and get offsets and get paid to do it. Because, as you know, it's sort of, with the CDM, once we gave developing countries, we said we'd paid for everything, then it was very hard to get them to turn around and say, OK, now you guys have to make reductions on your own that you pay for. And we have the same problem here in the United States. So I think the answer is let's hold down the number of offsets and let's hold up the quality of the offsets and I think that's doable.

Monica Trauzzi: And talk about focusing on key industrial sectors, what's been done in Mexico and Brazil and China. They seem to have had a lot of success by focusing in on those sectors.

Ned Helme: Absolutely right, absolutely right. We do a lot of work in all those countries and I think one of the big myths in the United States is that China is doing nothing, so we shouldn't do anything. And, in fact, China has one of the most aggressive programs in the world. Their reductions, if their program is fully implemented by 2010 will be as large as the European Union's proposed -30 percent reduction and it's based on doing real and aggressive things in cement, in steel, in aluminum, energy efficiency, improvements in car standards, improvements in truck standards, building a lot of renewable energy. So there's a lot going on out there and it's myths. And I think when we think about what are we going to ask developing countries to do in the next round, we really want to focus on these key energy intensive industries, which is where they've already started to work, and which is where the fight lies here in the United States, because where is the opposition? Eight percent of the emissions come from steel, cement, aluminum, yet they're worried about losing jobs and that's the place we need it. So if we can solve this, you know, have good actions as we're seeing, build on what's going on in China, Mexico, Brazil, in these sectors, it makes it much easier to get a tough bill and a tough program through the United States. So I think it's the right place going sectoral, focusing on those sectors, is the place where we're really going to have movement in this coming year.

Monica Trauzzi: Ok, it sounds like there's some positive stuff happening, but there are also some challenges like in Europe, they are facing challenges meeting certain targets and now they're facing economic challenges just like we are here in the U.S. Is the economy a game changer for moving forward on climate negotiations? Does that sort of change the discourse that we're going to be seeing over the next year?

Ned Helme: I don't think it's a fundamental game changer because I think you have to remember we're debating what to do from 2012 to 2020. And, ostensibly, this financial crisis is going to be worked out, even if we have a tougher session for a year or two we're done by 2010. So we're talking about a longer term, an issue that we're trying to do things to that 2020 period and on to 2050. So I don't see it as a game changer that way. The place where it matters is the deal in Bali was developing countries take action that's monitorable, reportable, and verifiable in return for financing from Annex 1, from the big developed countries. It's going to be hard to move that finance in 2009 with the kind of crisis we face, but I think in 2010, 2011 it's doable. So I think the place where finance and the economic crisis comes into play is this question about does it make it hard to put money on the table for developing countries in the near term? I think the answer is yes, it's harder than this next year, but in the timeframe we're really talking about I think the deal really comes together in 2010, 2011, and at that point we'll be ready to do it. So I think it's OK.

Monica Trauzzi: And when does the U.S. have to have something on the books domestically to keep the international community happy?

Ned Helme: Well, I think, as I said, the key is do we move this bill down the track by Copenhagen? So maybe it hasn't passed, but it's well along, so I know the target is going to be fairly substantial. OK, that's the key. And then if you pass it in early 2010 ...

Monica Trauzzi: Is that likely though?

Ned Helme: I think so.

Monica Trauzzi: Is that likely in 2009?

Ned Helme: I think so. I think we'll see, you know, the bill won't have passed, but I think you'll get the agreement on the target. The fight in the United States is about who gets the pie? If we auction the allowances who gets the money? If we give away the allowances for free under cap and trade, who gets the allowances? That's where the battle is. All the companies want their piece of this. Lots of other interests want pieces of this. That's the fight, but that's not an international fight. The key is what's the cap? That's the only piece that really matters to the international debate. And I think we will get that done soon. If Obama comes down and says I want 1990 levels by 2020, Waxman puts a bill in at least as tough, we have the same thing in the Senate, that sends a signal. We saw this in 1990, when President Bush was president, on acid rain. He put the target out and that was solid and we had a big fight about who got the money, but the target never changed. It was held solid all the way through and I think we'll see the same thing here, that's my hope.

Monica Trauzzi: Final question here. What if Obama uses the Clean Air Act to regulate emissions? Does that send a signal that maybe even if there isn't some legislation on the table, does that send a signal to the international community that he's serious about addressing this issue? Or is that not enough?

Ned Helme: I think that helps. I think that helps, but I think it's more important domestically, because you send that signal, it's an action forcer. So the Republicans in the Senate can't drag their feet and say, well, we don't want this, because all of the corporate community thinks doing it through the Clean Air Act is a terrible disaster. I think you can do it. I think you can do the Clean Air Act and do it. Now, it's not optimal, but you can get it done and it's an action forcer. It makes things happen. So I think it helps us. I don't think it's as important internationally, it's more important domestically.

Monica Trauzzi: OK, we're going to end it right there.

Ned Helme: OK, thank you.

Monica Trauzzi: Thanks for coming on the show.

Ned Helme: My pleasure.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

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