Thanks so much. It’s a pleasure to be here. I have always been a great fan of this place. Down in Washington, I’ve had the opportunity to work with two of your current faculty – first, Harold Koh, the remarkable Legal Advisor under Secretary Hillary Clinton whom I first met in 1991 when I recruited him to speak at a war powers hearing chaired by my then boss, Senator Patrick Leahy; and Matt Kotchen, who came to run Treasury’s climate change effort in 2013, and so was an important colleague of mine. I thank them both, as well as the others who helped organize my visit to Yale. And let me thank one other son of Yale, my own boss, Secretary of State John Kerry, whose leadership in combating climate change is visible every day.
I also want to recognize, up front, Yale’s broad commitment to addressing climate change, and your rich endowment of thinkers on this subject across a wide range of disciplines, from the natural sciences, to economics, law, policy and politics. It’s enormously impressive, and I learn from you.
Today we are poised for the stretch run regarding the latest round of international climate negotiations, which were launched at the end of 2011 in Durban and are scheduled to culminate in Paris in 14 months. In just over six weeks, this year’s major negotiating session begins in Lima and will play an important role in setting the table for the final session of talks next year. Climate negotiations have been going on in one way or another for over 20 years now, and they are always fraught with peril. But we have a real opportunity now to do something important.
The main focus of my remarks today will be on this Durban round of the negotiations – what we need to do, and avoid doing, to reach a successful new agreement.
But before we get there I want to briefly review some of the big climate developments of the past year in science, policy, technology, and political engagement. It’s always worth remembering that negotiations, while crucial, are far from the whole answer to climate change. They are necessary, but certainly not sufficient.
The essential task before us, after all, is to transform the energy base of our economies from high to low carbon, and this depends on the political will of governments at home setting the rules of the road, providing the incentives, removing the barriers, funding the R&D, and spurring the investment needed to hasten this transformation.
On the critical issues of political will and public support, we are moving toward an eventual tipping point. I can’t predict exactly when it will come, but we have all seen in recent years, the abruptness with which hot-button issues can suddenly become the stuff of consensus. You see more and more signs out there – investors expressing concern about the potential for “stranded assets” in the fossil-fuel business; major industrial companies modeling the effects of future carbon pricing on their bottom line; a move in public opinion polls, captured, for example, in the Spring Report on “Politics and Global Warming” by the Yale Project on Climate Change Communication; a change of tone from some of those who used to be aggressive climate deniers. I doubt, even a year from now, whether major political candidates will consider it viable to deny the existence of climate change. Something is happening, and the pace of that something is going to quicken, especially driven by young people like you, who have the most to lose by dawdling evasion.
U.S. Action. On our own home front, President Obama has mobilized a full-throttle effort to combat climate change. He took important action on climate in his first term, including, among other things, the issuance of major new rules to double the fuel efficiency of our cars and light trucks, as well as the first efficiency standards for medium and heavy vehicles.
But from the moment of his Second Inaugural Address, the President signaled that climate change had become a first order priority. In his State of the Union address, just a few weeks later, he left no doubt that he was ready to take bold action. Four months later, he announced his Climate Action Plan in a powerful speech at Georgetown, and ever since, the White House and Cabinet have been in high gear to implement the plan – driving action to reduce emissions, build greater resilience, and increase public awareness.
In a steady drumbeat of second term actions and events, the Administration has, to give just a few examples, issued a landmark proposed rule that will cut emissions of existing U.S. power plants 30% by 2030 and another proposed rule to require new power plants to meet rigorous emissions standards; moved at a rapid pace to issue tough efficiency standards for the equipment and appliances that make buildings run; announced the planned extension of heavy duty vehicle standards beyond 2018; announced a broad strategy to reduce the emissions of methane, our second leading greenhouse gas; issued a proposed rule on HFCs – industrial gases with intense global warming potential; and issued the National Climate Assessment on climate impacts at home, showing that climate change is already affecting every region of the country and every sector of our economy.
And we are talking about climate change. Frequently. Steadily. The President, the Cabinet – very much including my boss, Secretary Kerry – and other Administration leaders.
This mobilization of American effort matters. Enormously. It matters because the United States is the biggest economy and largest historic emitter of greenhouse gases. Because, here, as in so many areas, we feel a responsibility to lead. And because here, as in so many areas, we find that American commitment is indispensable to effective international action.
And make no mistake – other countries see what we are doing and are taking note. As I travel the world and meet with my counterparts, the palpable engagement of President Obama and his team has put us in a stronger, more credible position than ever before.
The Climate Summit. Meanwhile, in New York last month, during the UN Climate Summit where world leaders were supposed to be the main event, the people stole the show – nearly 400,000 of them, marching in the streets in the biggest US climate demonstration ever. And the Climate Summit itself saw strong expressions of commitment by a wide array of leaders, including President Obama, and the announcement of a broad range of new initiatives by countries, cities, businesses and NGOs.
Innovation. On another front, the non-political story gathering force is clean energy development and dissemination. Some of this involves technological discovery, some involves dissemination, some indicates a shift in the zeitgeist toward clean energy. And the fact that these developments occur despite mixed signals and incentives from government suggests that a clean tech revolution could occur if we got those signals right. Consider just a few examples:
Reports. The past year has also seen the publication of a raft of influential reports on climate science, climate impacts, and the economics of climate action. The IPCC – a broad panel of world-leading climate scientists – published the first three installments of its Fifth Assessment Report, the first since it won the Nobel Peace Prize in 2007. These reports describe “unequivocal” warming of the climate system and “widespread and consequential” impacts of climate change that are very likely to get worse.
As already noted, the United States released our own National Climate Assessment last May, focusing special attention on regional impacts, such as increased heat waves and coastal flooding in the Northeast, and increased drought and wildfires in the Southwest.
A nonpartisan alliance of three leaders in business and politics – former Treasury Secretary Hank Paulson, former New York Mayor Mike Bloomberg, and former hedge fund manager turned political activist, Tom Steyer – released the “Risky Business” report, focusing on the steep cost of failing to take robust action.
And just last month, an international coalition led by former Mexican President Felipe Calderon, released “The New Climate Economy,” an important report on achieving economic growth while fighting climate change. The report doesn't sugar-coat the challenge of the clean energy transformation, but says it is achievable at a relatively modest upfront cost that is likely to pay for itself over time – if we get the policy right. The report says the next 15 years are critical, because some $90 trillion will be invested for long-lasting infrastructure in energy, cities and land use around the world, and we’ve got to invest it right, in low-carbon alternatives.
Now, hearing about all that is going on outside of the international talks, you might wonder whether we need those fraught negotiations at all. Indeed, this is a subject in the “Room for Debate” section of the online New York Times. But establishing a strong, sound, stable international regime is a crucial part of the puzzle. We need an international agreement to prod countries to take aggressive climate action at home; we need it to supply the essential confidence countries require that, if they act, their partners and competitors will do so as well; and we need it to send a clear signal to businesses, investors, innovators and governments that the world’s leaders have committed their nations to the climate fight.
What I am going to do now is to give you a bit of context, then sketch out the kind of agreement we are trying to achieve, address the most important sticking points to getting this done, and finally share some thoughts about the approach I think countries will need to take in order to reach a consensus agreement.
So, first, context. Climate change negotiations are inherently difficult, first, because climate is not just an environmental issue – it implicates virtually every aspect of national economies. So limits on emissions make countries nervous about economic growth and development. They are also difficult because the UN body where these talks occur includes over 190 nations; these nations are grouped into various blocs with criss-crossing agendas and priorities; long-standing north-south resentments continue to roil the debate; and negotiations are governed by a consensus rule of procedure, which, in effect, enables any small handful of determined countries to block progress. So this is no easy task.
Climate negotiations have been going on in one form or another for over 20 years. The foundational agreement was the UN Framework Convention on Climate Change (UNFCCC), concluded in 1992 and approved by the Senate without controversy during the latter days of the first Bush Administration. The stated purpose of the Convention is to avoid dangerous climate change. The Convention created two main categories of countries based mostly on their material state of development in 1992 – Annex 1 largely for developed countries and Non-Annex 1 for developing. We will return to this point later, because the split between developed and developing countries has been the singular fault line in these negotiations from the beginning. The Convention required all countries to take action to limit their greenhouse gas emissions, but required no specific commitments.
In 1997, the Parties negotiated the Kyoto protocol, which included individual, legally binding commitments to reduce emissions in the period 2008-2012, but exempted developing countries from such obligations. This exemption amounted to the political death knell for the Kyoto Protocol in the United States. The Clinton Administration, recognizing political reality, stated that it would not submit the new agreement to the Senate for approval without “meaningful participation” from developing countries, and virtually none ever came. In 2001, the second President Bush effectively withdrew the United States from the ongoing Kyoto negotiations. With the US and all developing countries on the sidelines, the Protocol covered less than 30% of global emissions.
In the two large annual climate conferences held in 2009 and 2010, in Copenhagen and Cancun, the Parties negotiated new accords covering the period through 2020. Copenhagen was a rancorous meeting and widely dismissed as a failure, since it didn’t deliver the comprehensive, legally binding treaty many hoped for. But, Copenhagen, together with Cancun, produced important results: for the first time, all major economies, developed and developing, and many others, agreed to implement mitigation targets or actions and to do so under a new regime for international transparency. And though politically rather than legally binding, countries are working hard to meet those targets. Anyone who doubts this should take a look at the intensive effort underway in countries like the United States and China to meet those targets. The accords also called for the establishment of a new Green Climate Fund and new Climate Technology Center and Network to provide technology assistance to poor countries.
At the 2011 meeting in Durban, the Parties launched a new round of negotiations meant to be concluded in 2015 and to cover the period from 2020 forward. The short mandate for this new negotiation, known as the Durban Platform, stipulated, in effect, that the Parties would seek to develop a new legal agreement that would be applicable to all, with the precise legal nature to be determined. The central meaning of this mandate was that the new agreement would not be Kyoto – that its obligations and expectations would apply to all countries. With developing countries already accounting for a majority of greenhouse gas emissions and expected to account for two-thirds by 2030, there is simply no other way to conceive a new international regime.
That’s the context. Let me now sketch out the kind of agreement the United States is trying to achieve – an agreement that is ambitious, so that it can start to put us on the track that science counsels; inclusive, because we cannot meet our objectives without broad participation; durable, because our mission now is to negotiate an agreement for the decades, not for five or ten years; and fair, so countries feel their needs are respected and that they are getting a fair shake. We’ll look at the three main pillars of climate agreements – mitigation, adaptation and financial assistance.
Mitigation. Mitigation is about reducing greenhouse gas emissions. It’s what people think of when they think of action to contain climate change. Strong and progressively more robust action by countries to cut their emissions is surely the sine qua non of any climate agreement. The question for a new agreement is how to structure mitigation commitments to produce the most effective result.
We support an agreement based on each country putting forward its own, nationally determined commitment – “contribution” in the lingo of the negotiations, or “NDC” for short. This NDC structure, which has attracted a fair amount of convergence, makes sense. First, it will attract broad participation because it will quiet developing country fears of getting strong-armed into taking targets beyond their capability; and without broad participation there will be no ambition. Second, it will produce undertakings that countries are genuinely prepared to implement.
We think the first end date for NDCs should be 2025 because we think it will lead to greater ambition down the road. In particular, because we see both political will and technology development increasing over time, we think the target we could put forward for 2030 five years from now will be measurably higher than a 2030 target we could put forward now. So we don’t want to see low ambition locked in for 2030. But this is an open issue and some countries prefer a 2030 end date.
Beyond the first end date, we see progressive updating of our targets every five years. Remember – the Paris agreement is not just about 2025 or even 2030 targets, it’s about trying to create a lasting framework that won’t have to be renegotiated over and over.
We also proposed that countries put their intended NDCs forward early, say six or nine months before Paris, to allow for a “consultative period” as a means of encouraging the most ambitious contributions possible. This is just a “sunshine” idea, and it has largely been accepted. Our reasoning was that, if countries know their intended NDCs will be open for all to see and comment on – including other countries, civil society, think tanks, analysts, the press – this will goad them into putting their best foot forward.
We also support a strong accountability system. Whatever our mitigation commitments are in terms of content and legal character (and I’ll come to the legal question later), it is essential that others are able to understand clearly what they are and to track whether they are being implemented. Such a system is made up of a number of elements:
Taken together, these pieces would add up to a coherent accountability system that includes: mitigation contributions that are clear by virtue of upfront information, real by virtue of being unconditional, and credible by virtue of being buttressed by domestic measures; certain rules, norms, and expectations that put appropriate boundaries around our nationally determined contributions; reporting, to make sure our efforts are fully transparent; and review, to promote good faith implementation.
Adaptation. Let’s turn now to adaptation, a key focus of the UNFCCC. For a great many smaller and poorer countries, which emit little but can suffer a lot from climate impacts, adaptation is the main concern. And even the most advanced countries need to engage in concerted adaptation and resilience planning – just ask anyone who was in the direct flight path of Superstorm Sandy.
Stated most simply, what countries need with regard to adaptation is better planning and more funding to help implement the plans.
Better planning is essential because funding of one-off projects will not build the kind of resilience or adaptive potential at-risk countries need. The new agreement should do two important things:
Provisions like this could lend momentum to real world adaptation action and help funders direct adaptation assistance to greatest effect.
I should say that the United States is already expanding the ways we help developing countries build their climate resilience. In fact, this was a central theme of the President's speech at the Climate Summit. He announced that we would bring to bear the unique scientific capabilities of the United States to help developing countries by delivering earlier and more accurate outlooks for extreme weather events, as well as powerful data tools to help these countries plan for long-term climatic changes. And with regard to the National Adaptation Plan process, we intend to further boost our support going forward, including through the establishment of a global network to better coordinate NAP support among countries.
We also all need to provide more funding, but this is part of the larger financial assistance question, so let’s turn to that now.
Finance. The call for financial support is a perennial part of the negotiations. It is deeply in the interest of the United States and other advanced countries to help poorer countries build resilience against the severe impacts of climate change and to organize themselves to build low-carbon economies, so that the world collectively can secure the deep reductions we will need by mid-century.
The Green Climate Fund. The story on financial assistance has been improving strikingly, and it is about to get better. After a lot of hard work the last few years, the Green Climate Fund, called for in Copenhagen, has a headquarters near Seoul, an Executive Director, a staff, and, in a matter of weeks, will have a first round of capitalization pledges. Moreover, on the subject of adaptation, the Board of the GCF has already decided that it should allocate money 50:50 as between mitigation and adaptation, on a grant-equivalent basis. That is a big deal, and will get a lot more money flowing for adaptation than has ever flowed before.
$100 Billion Commitment. The other financial focus for the Paris agreement is likely to revolve around the commitment made by developed countries in Copenhagen to mobilize $100 billion a year by 2020 from all sources, public and private, in the context of meaningful mitigation and transparency from all countries.
The United States, in concert with other donor countries, has been spearheading an effort to boost the effectiveness of various international channels in mobilizing climate finance to support low-carbon, climate-resilient development in poor countries. These include the World Bank and regional development banks in Asia, Africa and Latin America; development finance institutions such as our own Overseas Private Investment Corporation (OPIC); export credit agencies such as our Exim Bank; and all the bilateral assistance programs that provide climate-related aid to poor countries. These channels will continue to operate, so while the Green Climate Fund has the potential to become the preeminent channel of climate finance, it will still be only one among many.
Much more money is flowing than ever before – well over $30B, perhaps over $40B per year of public funding, not counting the substantial private funds that much of that public funding is able to leverage. For example every time OPIC provides funding for clean energy investment in Africa, Asia, Latin America, their support draws in private investment at the rate of more than one private dollar for every public dollar.
We’re also pursuing new and innovative approaches to unlock more climate finance, through efforts like the Global Innovation Lab for Climate Finance. We launched the Lab in June of this year with an impressive group of Principals and a very encouraging reception, as dozens of ideas were submitted. Seven were selected for closer scrutiny, with the intent to choose a few of these to road test.
Regarding the new agreement itself, we think it should call upon Parties to: reaffirm the importance of financial support for countries in need; prioritize the poorest and most vulnerable, especially for adaptation; develop national plans for low-emission development and adaptation; strengthen the domestic policy environments of recipient countries to attract private investors; start phasing out subsidies for fossil fuels, estimated at well over $500 billion a year worldwide, only a small part of which helps poor people; contribute public climate finance consistent with their real capabilities; and improve reporting both on the provision of finance by donors and the use to which it is put by recipients.
Legal form. Finally, let's talk about the legal form of the Paris agreement. The Durban mandate says, in effect, that the new agreement will be a legally binding one in at least some respects, but doesn’t specify which ones. We think the most interesting proposal on the table is New Zealand’s, under which there would be a legally binding obligation to submit a “schedule" for reducing emissions, plus various legally binding provisions for accounting, reporting, review, periodic updating of the schedules, etc. But the content of the schedule itself would not be legally binding at an international level.
We have also suggested that a country might buttress the force of its submission by including a description of the domestic legally binding measures that will be used to help meet the stated goal.
Some are sure to disapprove of the New Zealand idea, since the mitigation commitment itself is not legally binding, but we would counsel against that kind of orthodoxy for several reasons. First, many countries, including major ones, won’t be willing to make their mitigation commitment legally binding at the international level, and once some balk, the premise of a legal form applicable to all unravels. Second, many countries, if forced to put forward a legally binding commitment, might low-ball that commitment out of anxiety about what legally binding might mean in this context. Third, the accountability provisions that are legally binding in the New Zealand approach do most of what is needed in any event – allowing others to understand clearly what the mitigation commitment is and to track whether it is being implemented.
The value of a new agreement. So let’s review the fundamental question. If we were able to conclude a new climate agreement in Paris roughly along the broad outline I’ve sketched out here today, would we have accomplished much? I think the answer is unequivocally yes. We would have, for the first time, established a stable, durable, rules-based climate agreement with legal force that:
This would be meaningful indeed. Nothing like it has happened before. Certainly not Kyoto, which never applied to more than around 27% of global emissions. Certainly not Copenhagen and Cancun, which have been important bridges to progress, but did not create the kind of system we’re talking about here.
The key obstacle. This, then, would be a significant advance that would set us on a path forward. But there are real obstacles, and the most important takes us back to that fault line I alluded to early in my remarks – the split between developed and developing countries.
Common but differentiated responsibilities and respective capabilities – known as CBDR for short – is the core principle asserted by developing countries. It means that we have all have common responsibilities in regard to climate change, but that what we need to do must be differentiated according to our own circumstances and capabilities.
Developing countries have cared about CBDR so much because the idea of having to limit carbon emissions makes them anxious. Emissions, after all, come principally from burning fossil fuels to run economies, so action to limit emissions sounds to many countries like a threat to their core imperatives of economic development, growth and eradicating poverty.
Of course the whole point of the clean energy transformation is to break the link between economic growth and carbon emissions, so that vibrant, growing economies can run while burning little carbon. We are on the way toward that goal, but we're not there yet.
Conceptually, we have no problem at all with CBDR and respective capabilities. We see it as an appropriate and enduring principle. Indeed a key rationale for the NDC structure we support is that we see it as fully compatible with CBDR. It is a self-differentiated structure in which a country is asked to do its best as it sees fit, consistent with its own view of its circumstances and capabilities.
The trouble arises because many countries have taken CBDR to mean that the two 1992 categories -- Annex 1 (developed countries) and Non-Annex 1 (developing) must never change and must determine the form and content of any new agreement.
Our view is that once we have made sure that the material interests -- those core imperatives -- of developing countries are fully protected, and we have by virtue of the NDC structure, then there is no justification for using fixed, 1992 categories to determine who is expected to do what in a new agreement taking effect nearly 30 years after 1992 and intended to define the course of climate diplomacy for decades to come. Such a separation would be inimical to ambition and would undermine the political cohesion we need to build an effective and durable climate system going forward.
The original division of countries, after all, was based on material circumstances, not some unchanging feature of national culture or geography, and those material circumstances have changed, sometimes dramatically, in the intervening years and will keep changing in the years ahead.
Some developing countries argue that changing circumstances are irrelevant, because the categories are based on history, but of course history did not end in 1992, it begins every yesterday. China is not just the largest emitter of greenhouse gases, it is the second largest historic emitter. Nearly every decade, the world emits more than all the CO2 we emitted before 1970. A number of non-Annex 1 countries are at this point among the world's wealthiest. Dozens have higher per capita income than the low end of Annex 1 countries. And so on.
Of course, Annex 1 and non-Annex 1 are categories of the 1992 Convention, and that won't change. But they cannot be the basis on which the form and content of the new agreement are written.
Now I have heard some comments lately saying that self-differentiation is not enough, that there needs to be more. But for those who might at first blush agree, I’d ask what is that “more” that you have in mind and what purpose would it serve that is not served already by the self-differentiated, NDC structure?
In short, we accept and support differentiation, the NDC structure is fully compatible with CBDR, every other provision of a new agreement where differentiation is appropriate can be addressed in a manner compatible with CBDR, and concerns about backsliding can be addressed. Basing the new agreement in form or content on immutable 1992 categories cannot be justified, and insisting on that kind of backwards-facing structure would be a deal-breaker. We need to build our new agreement looking forward, to reflect the economic, political and environmental realities of the next decade and beyond.
Let me conclude with a few summary thoughts.
First, climate change is an epochal issue that is going to loom large for your generation, worldwide. You have the most to gain if we get this right and the most to lose if we get it wrong. And the “we” here includes you. Whether you end up working in ways related to clean energy and climate, or in a thousand unrelated endeavors – be aware of climate change, care about it, and make sure your leaders do the same.
Second, the transformation of the global economy to one based on clean energy is the name of the game. Domestic policy, international negotiations, research, innovation all revolve around that. Forests and land are also crucial – both as intrinsically valuable and for their role in capturing CO2 – but our core imperative has to be to break the link between growth and burning fossil fuels.
Third, engagement is crucial. It’s a basic rule of politics that politicians listen to the voice of potential voters. Maybe not immediately, but before long. When politicians come to believe that not listening could be detrimental to their political health, they listen.
Fourth, we have a great opportunity to take a large step internationally, if we strive to put forward ambitious targets and actions, pursue common ground and close the deal that is there to be had in Paris. I think most countries understand, fundamentally, what the deal is. It won’t be everything that anyone wants, but it can be – it should be – an historic start, and the time to seize the day is now. The usual brinksmanship of holding cards until the 11th hour is a bad bet, because too much is riding on our success. We can’t afford to miss this opportunity to establish an ambitious and workable new international climate order. And the UNFCCC, as a credible organization, cannot afford another perceived failure at a pivotal moment.
An ambassador colleague of mine from a developing country once told me why he preferred bilateral to multilateral negotiations. In the bilateral context, he said, the work was usually pragmatic and practical, but in multilateral efforts, negotiators often get theological, defending their cherished orthodoxies to the death rather than seeking to find a way forward.
We’ve got to leave theology behind now; to recognize the bargain, seize it, and take a big step forward that we won’t regret. I think we can do this and I think we will do it. But the clock is ticking.