U.S. & China GHG Emissions: Diverging Trends

Recently, the U.S. Energy Information Agency (EIA) released a report on energy-related carbon dioxide emissions in 2009. Carbon dioxide emissions from energy use make up over 80 percent of our country’s greenhouse gases. The report showed that last year the U.S. had its largest absolute and percentage decline since the EIA started keeping statistics in 1949. Carbon dioxide emissions declined by 7 percent - or 405 million metric tons.

The report cites three factors that led to the reduction in emissions: per capita gross domestic product (GDP which is economic output), energy intensity (the amount of energy consumed relative to total output or GDP) and carbon intensity (the amount of carbon produced per $1,000 of GDP). Although the economic downturn had been expected to lower emissions, the slowdown in economic growth only accounted for about a third of the reduction. The remainder was driven by greater energy efficiencies and less energy-intensive activities in our economy. Energy intensity has declined by an average of 2 percent from 2000 to 2008. Carbon intensity also decreased as the cheap price of natural gas caused many utilities to burn it for electricity generation instead of coal.

The U.S. performance stands in stark contrast to China's performance. The New York Times article below points out that China’s growing demand for power from oil and coal has led to the largest six-month increase in man-made greenhouse gases ever by a single country. Advocates of climate change legislation often cite the growth of renewable energy in China as a sign that they are doing more than the U.S. However, these advocates ignore the explosive growth in the consumption of energy from traditional sources that is dwarfing renewable energy use. Part of the reason for the increase, according to the article, is that China’s economy is shifting from light export industries to heavy industrial production - often heavy industrial production that used to be done in cleaner, better regulated western economies. The increase in energy-intensive industries and increased use of coal is making China’s overall economy less energy efficient, reversing a four-year trend of energy efficiency gains.

The lesson here is that growing energy efficiency and a decrease in carbon intensity is beginning to break the link between economic growth and carbon dioxide emissions in the U.S. Continuing that trend, largely driven by the market, is the way to reduce emissions without harming the economy, as opposed to adopting a large, bureaucratic cap-and-trade program. And these news items are a further reminder that developing countries with major economies are the current and future driver of man-made greenhouse gas emissions. Without action by them, what we do here in the U.S. will have little impact on the global climate, but a large impact on our economy.

“The Carbon Recession,” Wall Street Journal, May 10, 2010. http://online.wsj.com/article/SB20001424052748704370704575228311111072860.html

“China’s Energy Use Threatens Goals on Warming, New York Times, May 7, 2010. http://www.nytimes.com/2010/05/07/business/energy-environment/07energy.html?src=busln

EIA Emissions Report: http://www.eia.doe.gov/oiaf/environment/emissions/carbon/index.html

Mt. Eyjafjallajokull

Recently, I visited Mt. Eyjafjallajokull in Iceland to see this volcano firsthand and speak with scientists studying the eruption and its potential impact on our climate. Volcanoes are one of the sources of naturally occurring greenhouse gases and large eruptions in the past have impacted our climate.

During an eruption, volcanoes release a number of gases into the atmosphere. The most abundant gases typically released from volcanoes are water vapor, carbon dioxide and sulfur dioxide. Scientists have calculated that volcanoes emit between about 130-230 million metric tons of CO2 into the atmosphere every year.

While it is unclear at this time how much total CO2 is expected to be released from the current Mt. Eyjafjallajokull eruption, the 1991 eruption at Mt. Pinatubo in the Philippines was estimated to have released 42 million metric tons of CO2, roughly the same as the amount emitted by the state of Montana in 2005. The eruption at Mt. Pinatubo was one of the biggest volcanic eruptions in the 20th century, and Mt. Eyjafjallajokull is significantly smaller by comparison. Current estimates place CO2emissions from Mt. Eyjafjallajokull at 150,000 to 300,000 metric tons daily, but it is unclear how long these levels will be sustained.

But the effect of volcanoes on the Earth's climate goes beyond CO2. The sulfur dioxide emissions from volcanic eruptions are also thought to be responsible for the global cooling that has been observed for a few years after a major eruption. Emissions of SO2 from an active volcano can reach the stratosphere where they convert to tiny persistent sulfate particles. These sulfate particles reflect energy coming from the sun, which produces a widespread cooling effect by preventing the sun's rays from heating the Earth.

Mt. Eyjafjallajokull is a stark reminder of how powerful nature is and how little we can control it. This eruption grounded thousands of flights and stranded tens of thousands of travelers in Europe. Yet some people in the climate debate seem to think humans control everything. We need to set aside that hubris. Politicians who use science to push their agendas would be wise to learn from this event and understand that our current climate models have serious limitations. We would be better served in pursuing realistic solutions and not expending tremendous financial resources under the false assumption that we humans control everything.

“Volcano emitting tonnes of CO2 daily,” April 20, 2010 http://news.smh.com.au/breaking-news-world/volcano-emitting-tonnes-of-co2-daily-20100420-sppr.html

Video of Mt. Eyjafjallajokull erupting

The Changing Climate Debate

It has been an eventful few months for people following the "settled" climate change debate. Last December began with the Climategate scandal involving emails that have raised questions about the data the International Governmental Panel on Climate Change (IPCC) has relied on to make its forecasts. That was followed by the spectacular failure at the Copenhagen Climate Change Conference. January brought an upset special election in Massachusetts that made already skittish moderate Democrats even less inclined to vote on a climate change bill. Then there was the discovery that some of the IPCC’s most extreme predictions about the impact of climate change were based not on peer-reviewed science but reports by environmental advocacy groups. And finally, the head of the U.N. Climate Change treaty process recently resigned and said that an international climate agreement was unlikely this year.

The momentum for passing climate change legislation that had been building over the last few years appears to be crumbling under the weight of misguided priorities. A healthy discussion about the science or realistic emission reduction goals was replaced by schemes to create a carbon market Wall Street could profit from and advocating an unprecedented level of government central planning.

All of these developments are a sign that the entire conversation needs to be changed. In many ways, the debate is stuck in the 1990s and needs to instead focus on the realities of today. Developed versus developing countries is becoming an irrelevant concept. Globalization has fueled the rapid economic growth of several Asian countries, and made it clear that emissions-dependent industry can rapidly shift operations to avoid regulation. The focus needs to be on all major economies, where the bulk of emissions are generated now or will be in the future. All major economies need to be on board if a global climate change solution is going to be effective.

Energy security needs to be a front and center concern. We cannot take our energy resources for granted. China sure isn't. China is investing all over the world in traditional and alternative forms of energy. They are investing in the Canadian oil sands, oil reserves in Africa, and produce 95 percent of the world’s rare earth elements that are essential to the manufacture of wind mills and hybrid car batteries. They are securing their energy future while we dither over policies that will do nothing to address global greenhouse gas emissions or energy security. We need to develop our domestic energy resources and tap into the resources of friendly trading partners like Canada and Mexico.

If we don’t change the conversation and our priorities, we will be less energy secure and will have done nothing to reduce global greenhouse gas emissions.

Coming Soon to a State Capitol Near You: Climate Change

Having come up empty in Copenhagen and facing defeat in the U.S. Senate, advocates for climate change legislation are retreating to the states.

No meaningful progress on an international climate change treaty was made at the Copenhagen Climate Change Conference. Key members of the U.S. Senate now predict that cap and trade won't see the light of day this election year either. But in our state capitols, proponents of carbon regulation are plowing ahead.

At the end of 2009, 11 northeastern states committed to develop a low-carbon fuel standard (LCFS) for their region. These states make up the Regional Greenhouse Gas Initiative (RGGI), which has already imposed a cap-and-trade program for electric utilities. The result: these states have the highest retail electric rates in the country (http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_b.html). Now they want to create an LCFS, which will drive up gasoline and diesel costs for consumers.

Not to be outdone, the Midwest Governors Association has made design recommendations for a cap-and-trade system and is preparing recommendations for an LCFS for the six states participating in its Greenhouse Gas Emissions Accord. Meanwhile, Minnesota and Michigan have introduced LCFS legislation, while Wisconsin is set to begin debating an omnibus climate change bill.

You won't be surprised to learn that western states are pursuing similar policies on a regional level and individually. Oregon passed LCFS legislation last year and now Washington is also considering establishing one.

And then there is California, the state responsible for developing these questionable policies. California’s LCFS goes into effect next year and its cap-and-trade program starts in 2012. Those two policies are the flagship programs for The Golden State’s climate change efforts and the success or failure of these actions in California will influence state-level activity across the country.

Other states should be wary of following California’s lead. California has proven to be a shining example of fiscal mismanagement, and is well on its way to legislating itself into junk bond status. Many of the impending climate regulations in that state are causing manufacturers to seriously consider closing shop for good or relocating their operations. In order to prevent further harm to the economy, one California state legislator is currently getting signatures to put an initiative on the ballot for the next election that would bar the state’s cap-and-trade program from going into effect until the state’s unemployment rate dips below 5.5 percent (the state’s unemployment rate is currently 12.3 percent, third highest in the country).

China and India made it clear in Copenhagen that they have no intention of committing to binding emission reductions. They would not even agree to international monitoring, reporting and verification of their emissions.

Most states are facing continued budget deficits and high unemployment. Climate policies that make businesses less competitive with other regions of the country and -- more importantly -- the world won’t help the situation. We need to make sure our state leaders understand that piecemeal policy is bad policy.

Copenhagen Update: What's Next?

What can we expect to happen next after the breakdown in Copenhagen? Considering that no deadline was put in place to reach an international accord, it seems safe to say that such an agreement is easily several years away, particularly in light of the great differences that exist on the major issues, like binding emission reductions.

The outcome in Copenhagen is also going to make it very hard for Senate Democrats, particularly those from Midwestern manufacturing states, to vote for anything that resembles the House bill. Considering China had little interest in even talking to our President in Copenhagen, those senators should be wary of voting for any bill that will send jobs in their states overseas. That is exactly what cap and trade will do.

Just as the Kyoto Accord should be torn up and a whole new approach developed, the same can be said of climate legislation before Congress. While we have been busy debating climate bills, China and India’s economies have continued to grow. China has spent the last year buying up energy and mineral resources around the world, including the Canadian oil sands. Meanwhile, we engage in a completely pointless either/or debate about energy. If we don’t wake up, we will find our energy security severely compromised in the not-to-distant future.

We need to refocus the U.S. debate so that it is about energy security and independence and how best to drive the technology needed to achieve both. The discussion needs to recognize the need for more nuclear power, the important role fossil fuels will continue to play, the need for economically sustainable renewable energy, and how to best drive energy efficiency. Greenhouse gas emission reductions will be a byproduct of this effort.

We will need all of these approaches to meet our future energy needs and increase our energy security. We cannot continue to delude ourselves into thinking one or two technologies alone will make the difference. The time to change the conversation is now, before it is too late.

Copenhagen Update: Broken Process

The U.N. Climate Change Conference in Copenhagen ended early this morning with delegates voting to “take note” of an agreement brokered by the U.S. that essentially establishes a system for third party verification of emissions and aid to developing countries. The final agreement did not establish binding emission reduction targets or even set a timeline for their completion. The vote to simply “take note of” – as opposed to approving – the agreement severely undercuts efforts by the Obama Administration to spin the agreement yesterday as unprecedented.

The Administration and other governments would be far better off being honest and admitting that the U.N. process is a failure that no amount of future talks can salvage. As noted in previous posts, the impasse is largely attributed to differences between developed and developing countries and the expectations for each under a new treaty. My main take away from this conference is that the U.N. process has simply become a forum for developing nations to extort money from developed nations under the guise of environmental protection and for traders who want to make millions of dollars in a new carbon market.

The President once again wasted an enormous amount of political capital for very little result. This agreement could have been hammered out by the Secretary of State and other foreign ministers while leaving the heads of state at home. Much of the stalemate came down to differences between the U.S. and China on issues like binding reductions, emissions verification and money. As this quote from the New York Times illustrates, the President is far more interested in a deal than the Chinese Premier: “Twice during the day, [Chinese Premier] Wen sent an underling to represent him at the meetings with Mr. Obama. To make things worse, each time it was a lower-level official.” The President needs to become a better negotiator with China on a whole range of issues.

The U.S. did float some interesting ideas over the two weeks to make China, India and other rapidly developing countries more accountable. One idea is to establish a new category of countries that captures this group and would not exempt them from making required reductions. This is crucial now that China is the largest emitter of greenhouse gas emissions. Another is to demand third party verification, which was part of the final agreement though questions remain as to whether it will have enough teeth to be effective.

The President interrupted a meeting of the leaders from China, India, Brazil and South Africa to finally get his audience with Mr. Wen. While it is embarrassing they started without him, this meeting may offer a path to a future agreement and exerting leadership. Ever since the Kyoto Protocol established different expectations for developed and developing countries, true progress on global greenhouse gas emissions reductions has been difficult. As I have said, Kyoto is broken and using its framework to craft a successor agreement will be a failure, as these talks have illustrated. It may make more sense for the leaders of the top ten emitting countries, which account for approximately 70 percent of global emissions, to work out an agreement.

A new direction is required for any international treaty to be effective. A new agreement has to recognize the changes that have taken place since 1997. With the United Nations predicting that two-thirds of the expected growth in emissions between now and 2030 will come from developing countries, exempting these countries from mandatory reductions makes no sense. And any agreement should be about the environment and not redistributing money to other countries and Wall Street.

Live from Copenhagen

Next week, I will be in Copenhagen for the United Nations Climate Change Conference. I will post updates from the second week of the conference where delegates from over 190 countries are negotiating a successor agreement to the Kyoto Protocol. Check in to find out the latest developments from the negotiations, as well as activities happening outside of the conference.

In the run-up to Copenhagen, expectations have been lowered. Major players have acknowledged that it is very unlikely that a binding treaty can be agreed upon by the end of the conference. Instead, political commitments for reduction targets are expected, as well as efforts to agree on a level of funding that will be provided by developed countries to help developing countries address climate change. The head of the U.N. Climate Conference said last week that he hopes a binding agreement could be reached by June. Even that timeline may prove to be too ambitious.

The roadblock on the way to Copenhagen is the same one that has existed since the Kyoto Treaty: establishing different commitments for developed and developing countries. In the last two weeks, the Obama Administration pledged to reduce emissions by 17 percent by 2020, which is the target established in legislation passed by the House of Representatives last June. That announcement was followed up by a pledge from China to reduce its carbon intensity by 40 to 45 percent by 2020 and India which said it would reduce its carbon intensity by 20 to 25 percent by the same year. All three countries would use 2005 emissions as the baseline year.

By reducing carbon intensity, China and India will become more energy efficient (something that is happening already), but their overall emissions will still grow. With the U.S. pledging an absolute reduction, the risk of “carbon leakage”, or the migration of emissions from developed to developing countries, is still very real. The result: lost jobs in countries like the U.S. and increased global greenhouse gas emissions.

While Copenhagen may not produce a binding treaty as many had expected only a few months ago, there will undoubtedly be many interesting developments. Check back next week to find out what is happening in Copenhagen.

Let's Trust Science to Fix Climate Change

Ask anyone who knows me and they will tell you that I am, generally, a skeptic/pessimist. Generally, I follow clear thinking, factual analyses of complex issues rather than the media talking heads and the fringe groups making the most noise on the marginal right and left.

So, imagine my surprise and excitement when I read Freeman Dyson's uplifting, optimistic view of climate change some years ago. I was reminded of this optimism last evening when I read "BRAVE THINKERS: A Retrospective," an article in the November issue of THE ATLANTIC MONTHLY.

Here is what was said verbatim:

http://www.theatlantic.com/

Name: Freeman Dyson

Job: Professor Emeritus, Institute for Advanced Study, Princeton
Why he’s brave: He’s taking a contrarian view on the Kyoto Protocol.
Quote: “I like to express heretical opinions. They might even happen to be true.”

---

Dyson, a renowned physicist and pioneer in quantum electrodynamics theory, has lately committed a heresy without equal in modern science: questioning climate change orthodoxy. Dyson doesn’t deny that excess carbon dioxide in the atmosphere is warming the planet. But he predicts that advances in bio-technology—especially the creation of genetically-engineered carbon-eating plants, which he foresees within two decades—will mitigate the damage with a minimum of economic and social disruption. In the meantime, he argues that large-scale carbon-restricting approaches like the Kyoto Protocol are ineffective and disproportionately hurt developing countries like China and India, where the potential to lift millions of people out of poverty now hinges on access to carbon-spewing industries. Such arguments have won him few friends; he describes the interaction between the majority of scientists holding conventional climate change views and the skeptical minority as a “dialogue of the deaf.” But in Dyson’s case, at least those arguments have evolved from a lifetime of scientific rigor and intellectual honesty.

So, Freeman Dyson, world-renowned physicist and rigorous intellectual contrarian, argues optimistically that carbon-eating plants will come to our rescue in the same way that oil-eating microbes have assisted us in cleaning up oil transport accidents, in the same way that science has assisted farmers in being more productive and less environmentally damaging. Of particular importance, it seems to me, is Dyson's concern that human-created scientific discovery and advancement will solve our greenhouse gas problems in the same way that Jonas Salk defeated polio. This optimistic, American can-do attitude brings with it the promise of enormous environmental benefit with a "minimum of social and economic impact."

Who do you trust more to solve our world's problems? Politicians and bureaucrats, or esteemed scientists like Freeman Dyson and the rigors of scientific inquiry?

Being a common sense person, like most people, I cast my vote for Freeman Dyson and science.

'Competitive edge’ big concern in climate change debate

President Obama delivered a clear message before the United Nations on climate change. But there’s a lot more ground to cover, and numerous specifics to flesh out. The Minnesota Chamber’s biggest concern is the impact of any legislation on the cost of energy. Minnesota historically has had competitive prices that in turn give our companies a competitive edge in the global marketplace. Whether we maintain that edge remains to be seen with any national or international agreement.

To be clear, Minnesota businesses are strong protectors of the environment. We’ve been major players in shaping state legislation to reduce smokestack emissions and increase the use of renewable energy resources. In the larger arena, from the standpoint of Minnesota businesses, we’ll lobby to make certain any cure is not costlier than the disease. To put the issue in perspective, emissions from Minnesota contribute only 0.37 percent of greenhouse gases worldwide, according to 2006 statistics. China and the United States each contribute about 20 percent. Minnesota businesses are first in line to advocate for policies that protect the environment and ensure a vital economy. But it’s shortsighted to adopt policies that threaten the livelihood of Minnesota employers and employees and do little or nothing to address climate change on the global scene.

Climate change most appropriately is addressed on the national and international levels. Even then, businesses must know the rules and the impact on their bottom lines. Minnesota’s laws on mercury reduction and renewables have been driving energy costs up in recent years. We need to play close attention to these rising costs if we are to maintain a healthy state economy.

Business Organizes Fight Opposing Waxman Markey

"Those who do not stand up for their own rights will certainly lose them" (theCommonSenseCurmudgeon@blogspot.com).

Despite being a summer dominated by heated public involvement and media coverage of the national health care debate, and relatively cool temperatures for the Upper Midwest, the National Association of Manufacturers (NAM) and the National Association of Independent Businesses (NAIB) have been planning and now have launched a multi-state campaign designed to influence Senate debate of Waxman Markey.

Together with state manufacturing associations in Michigan, Indiana, Missouri, Nebraska, North Dakota, Ohio, and Virginia, this powerful business coalition is encouraging small business owners and the public to make sure their collective voices are heard on the devastating economic impact of Waxman Markey on the national economy.

The national advertisement portion of the "Speak Out" campaign will run through September 4 and will include television, radio and the Internet.

Their early August-announced Study of the Economic Impacts of Waxman Markey conducted by NAM and the American Council of Capital Formation (ACCF) produced the following five key findings:

1. cumulative loss in GDP up to $3.1 trillion (2012-2030);

2. employment losses up to 2.4 million jobs in 2030;

3. residential electricity price increases up to 50% by 2030;

4. per gallon gasoline price increases up to 26% by 2030; AND

5. the manufacturing sector would absorb 55-66% of the jobs lost

NAM and NAIB are urging the public to lobby their Senators to oppose any climate legislation that damages job creation or raises consumer and business costs.

Considering the unemployment rate increases and stagnating incomes during the great recession that began in 2006, sounds like good advice to me.

Climate & Health Care: When Solutions Become the Problems

My dad had a saying, “Don’t let today’s solutions become tomorrow’s problems.” His point: know what you’re doing and don’t do anything to make matters worse.

As Congress sputters on the President’s health care and climate initiatives, I thought about dad’s advice but concluded that to be applicable to the President’s situation there needs to be a corollary: “don’t let the solution become today’s problem.”

There are a lot of similarities between health care and climate initiatives. Both are major, “changing-life-as-we-know-it” initiatives affecting all Americans with a lot of very complicated moving pieces and competing interests.

Candidly, I agree with President Obama that America should do something to address greenhouse gas emissions (GHGs) and the rising costs of health care.

The problem is that the President’s solutions have become problems and, perhaps, even bigger problems then the problems they are designed to solve. One reason is that the President and Democratic Congressional leaders are trying to convince us that their solutions are cost-free and easy. This just doesn’t pass the laugh test. Americans are used to their political leaders stretching reality, but that stretch has to be within the realm of common sense credibility. And, it’s just not credible to say that we can reduce GHGs without increasing the cost of energy or that health care coverage can be expanded without increasing the amount of money government takes from us.

Another reason the President’s solutions have become the problem is their complexity. The President’s climate and health care initiatives are both mammoth pieces of legislation that most people haven’t read, let alone understand what they do or how they will do it. Obviously, some will lose; some will win; and some will win and lose at the same time. Americans don’t need to know everything about every piece of legislation and are used to (and willing to) make these kinds of trade-offs. But, we need to understand the broad themes and how they are likely to affect us. Unfortunately, the size and complexity of the initiatives prevent such understanding, leaving him unacceptably saying, “trust us, we’re the government, we know what we’re doing and we’re here to help.” No wonder the thinking, swing members of the Congress are balking.

The third reason his solutions have become the problem is the speed he is pushing them. Again, I turn to one of dad’s sayings: “If you don’t have time to do it right the first time, why do you think you’ll have time to fix it the second time?” It was his version of “haste makes waste.” The President wants to make major changes to three of the biggest sectors of the economy (energy, health care and financial services) in less than 12 months. That’s fast; too fast…it’s turned the solution into the problem.

For many, most, the President has won the argument that climate and health care are problems that deserve solutions. But his solutions have become problems. His best course is to slow things down, skinny the bills and focus on improving one or two high leverage elements in each topic and make sure the substance of the efforts match the low-cost rhetoric. For energy, that means focusing on promoting more renewables, enhancing our energy efficiency efforts, and growing the nuclear industry. As for climate? These first items will make a big dent in emissions. In the meantime, spend the intervening time getting an international GHGs reduction agreement and think through how to implement a cap-and-trade program and the other regulatory tools…perhaps a Blue Ribbon Task Force could be convened.

US EPA, State Agencies, and Private Attorneys Meet in Chicago, Discuss Environment

There can be little doubt that the philosophy at the US EPA has undergone a dramatic change under President Obama. To more fully understand the new priorities at the US EPA as well as the current priorities of the state environmental agencies of the Great Lakes states (aka EPA Region 5), the American Bar Association Section of Environment, Energy and Resources held a day and a half conference in Chicago: State and EPA Perspectives on Environmental Issues In Region 5.

In what could be one of the preeminent environmental conferences in the Great Lakes region (having played a significant role in the conference I might be a bit biased), the program involved exclusively government speakers, including Commissioner Paul Eger of the Minnesota Pollution Control Agency. Although the conference featured numerous panels discussing aspects of environmental law from Resource Conservations and Recovery Act (RCRA) to the Great Lakes Interstate Compact and everything in between, the two most important presentations were the keynote speech by Bharat Mather, Acting Regional Administrator US EPA Region 5, and the State Environmental Directors Roundtable.

Mather spoke briefly regarding the American Reinvestment and Recovery Act (ARRA), the state-federal environmental partnership and the goals of his new boss Lisa Jackson. Discussing ARRA, Mather noted that the EPA has obligated 72% of its ARRA funds and that the primary issues with implementing ARRA are reporting, the Buy American provision, compliance with the Davis-Bacon Act requirement, and funding of green issues. On the state-federal partnership, he stressed that EPA’s role is oversight of the state agencies and that the focus should be how the two can work together to get things done. Turning to the goals of Administrator Jackson, Mather stressed four areas: 1) science must be the backbone for EPA; 2) EPA decisions must follow the rule of law; 3) EPA actions must be transparent; and 4) environmental justice should be considered in every EPA decision.

Mather then turned to EPA priorities in Region 5. The number one concern, he said, is climate change. This certainly should come as no surprise given the public announcements from Administrator Jackson. But it does reinforce the reality that the question is not whether greenhouse gases will be regulated in the near future, but what the vehicle for regulation will be. Among the other named priorities he discussed were new source permits, reducing diesel emissions, managing overall chemical risks, hazardous waste cleanup, and water quality. He noted particular interest in Minnesota when discussing the asbestos risk in mining and managing risks from perfluorocarbons. He also noted that one of the water quality priorities is addressing water nutrient levels in the Mississippi River as it relates to Gulf of Mexico hypoxia.

Following the keynote speech, Bert Frey, Deputy Regional Counsel US EPA Region 5, hosted a roundtable discussion with the directors of all six state environmental agencies (Indiana DEM, Illinois EPA, Michigan DEQ, Minnesota PCA, Ohio EPA, and Wisconsin DNR). Almost universally, the director concerns involved addressing climate change, improving water quality/wastewater management, and finding a way to accomplish these goals in the face of an ever-shrinking budget. The truly amazing theme in the roundtable was the staggering cost that we face to update our water infrastructure and to deal with storm water management. Time and again, the state directors would note that the tens or hundreds of millions of ARRA dollars dedicated to state revolving water funds did not meet the needs for infrastructure updates (all told, the EPA received $6 billion for water infrastructure, which has been allowed to the states and US territories.

It was not lost on many of us that this was the first time there had been a Region 5 environmental conference since 1999. After listening to the government attorneys and agency personnel speak for a day and half, it is clear that the days of market self-regulation have come to an end. In Minnesota and across the nation, we can expect to see new environmental regulation and a renewed focus on enforcement of existing regulations.

Submitted by Michael J. Mergens

Michael J. Mergens is an attorney at Larkin Hoffman Daly & Lindgren in Minneapolis. His practice includes a broad range of real estate matters, such as environmental permitting and litigation, land use approvals and disputes, and general real estate disputes. He has devoted much of his practice to the regulation of greenhouse gas emissions, which has begun to arise in the environmental permitting processes of various state and federal regulatory bodies. He also tracks the potential for regulations under the Clean Air Act.

Climate Bill Uneconomic & Costly: Failing the Good Lawmaking Test, Part II. Let’s Start Over on Climate Legislation

The test of good lawmaking is whether it 1) achieves the desired goals, 2) in the most economic and cost-effective manner, 3) with the fewest unintended consequences, and 4) enlists strong bipartisan support. My last blog posting argued the Waxman-Markey climate bill failed the first element of this “good lawmaking” test because it relies on carbon credit concoctions at the expense of achieving reductions on GHGs.

This posting explains one of many reasons why the House bill fails the second uneconomic element of the good lawmaking test, and why Congress would be wise to start over rather than keep moving forward on the current path.

Economic models can make the climate bill’s cost a wash or impose a very small per person cost. And, this is without factoring the unknowable affects of a changing climate. But no-cost outcomes only happen in Washington, which isn’t very good lawmaking and seems to be disingenuous, naive, or from a flawed belief that there is no cost in massive wealth redistribution.

The underpinning of Waxman-Markey is to impose a cost for emitting GHGs into the atmosphere. Supposedly, such a cost will encourage the emitter to either stop emitting GHGs completely if they can, or reduce its GHGs to a level where the costs of further reductions exceed the costs of emitting. Or, since Waxman-Markey uses the “cap and trade” methodology, an emitter may buy offsets from someone who has reduced their GHGs emissions more than they were required to. In theory, this cap and trade approach would yield the most economic GHG reductions.

However, as mentioned in my previous posting the Democratic majority distorted the offset program. Besides undermining the potential for actual GHG reductions, these distortions make figuring out how much it will cost to comply with the bill impossible. A host of dueling economic models are trying to figure out what the macro and micro costs of the Waxman-Markey bill will be. But, given its complexity, on-the-fly amendments and competing glass half-full versus half-empty assumptions…makes accurate cost estimates impossible, even if you agreed with the models. Thus, there is no way to know what the bill will cost. Unknown costs are more costly than known costs because they create risk and uncertainty. If you can’t ascertain the risk, your only rational course is to assume the worst thereby increasing the costs and uneconomic actions.

The unknown risk from the Waxman-Markey bill is one, failing; the other comes from what I call the “uneconomic averaging” of costs and benefits. Take, for example, a person with his head in the oven and feet in the refrigerator, so his average temperature is a normal 98 degrees. Clearly, the extremes are unpleasant but if one only looks at the average, one can incorrectly assume no harm. Or, take another more realistic example: my smart daughters will soon be going off to college; they will do well, get good jobs, and become valued taxpayers. Their taxpaying value to society will soon exceed what I paid for their college. Thus, society will clearly be economically better off; they will be happy so I’ll be happy…but I won’t be economically better off, in fact, I may be worse off since the opportunity cost of that money was investment in my retirement fund.

Advocates of the Waxman-Markey bill cite climate models that say the bill will have little costs. But, I doubt it and that can only be correct if viewed from this averaging approach. From a lawmaking perspective, such results are uneconomic short-term outcomes with the costs unfairly borne by just a few. If the models looked at the entities that actually have to pay the cost of the carbon reductions, those folks won’t get their money back (despite government redistributive promises). They won’t even be the happy but impoverished father whose girls visit him in the nursing home!

Thus, because of the unknown risks and the uneconomic “averaging” of the costs at the expense of those who will have to pay them, the Waxman-Markey bill fails the second element of the good lawmaking test. And, Congress should start over and simplify the bill so the American people know the direct and indirect costs…it is this simplicity that has people supporting a carbon tax.

Waxman-Markey Won’t Achieve Goals Failing the Good Lawmaking Test, Part I: Let’s Start Over on Climate Legislation

A couple weeks ago the U.S. House of Representatives barely passed a 1,200-page bill designed to address the nation’s greenhouse gas emissions. The “golf clap” applause for the bill comes only from those who believe passing something, anything, is better than passing nothing at all.

While I am among those who believe addressing GHGs is important, I am not praising the House’s achievement. Passing an ineffective, costly bill is worse than doing nothing. In fact, what the House’s “accomplishment” offers is more an example of a failed legislating experiment than good lawmaking.

There are four criteria for good lawmaking: the law will 1) achieve the desired goals 2) in the most economic and cost-effective manner 3) with the fewest unintended consequences and 4) has strong bipartisan support.

In this and subsequent blog postings, I’ll explain why the House bill fails all four good lawmaking criteria and that starting over is the best course of action.

I believe the Waxman-Markey bill is unlikely to achieve the desired goal of reducing GHG emissions.

Many in the environmental community share this concern due to the last minute provisions added to the bill that undermine its GHG-reducing elements. These last minute provisions were designed to garner Democratic votes to pass the bill. Many dealt with the use of agricultural offsets for carbon credits designed to enlist the support of Democrats from rural agricultural districts. Terrestrial sequestration of carbon can come from changing farming practices, converting cultivated lands to prairie, planting trees, and preserving forests. I’m not so sure the environmentalists concerns are correct; but they may be. Such approaches, like all lifecycle calculations, need more analysis.

But, I have a more concrete reason to question the effectiveness of the bill: it turns GHG reductions into a carbon credit accounting board game, sort of like Monopoly. Who can get the credits? How do they get them? How can we make the credits cheaper? What can be done with the credits? etc. This emphasis on the credits instead of GHG reductions creates a disconnect that assures that actual GHG reductions are unlikely to occur and certainly not to the levels desired by the bill’s authors and supporters.

Notice how the compromises made on behalf of agricultural interests took the form of allocating carbon credits for offsets? And, that is just one industry sector where “credits for offset” political trade-offs were made to curry favor or to allegedly lower economic costs of the bill. I fear that by focusing on credits instead of actual GHGs reductions no reductions will occur, leaving the worst of all worlds: higher energy costs, a fool’s gold carbon market created and increasing atmospheric concentrations of GHGs. How does that achieve the bill’s goals? It doesn’t; failing the first test of good lawmaking.

Accordingly, Congress should start over. The legislation should focus on getting actual reductions, even if they are small at first. That would put them on the good lawmaking path.

Goldilocks, Climate Legislation and Republican Engagement

In the story of Goldilocks and the Three Bears, Goldilocks, lost in the woods, comes across a cabin. In that cabin are three bowls of porridge, three rocking chairs, and three beds. She tests each of them and concludes that two of each is unacceptable; they are either too hot or too cold, too big or too small, too hard or too soft…but one bed, one bowl of porridge, and one rocking chair was “just right” and she enjoyed them.

I thought of this story as I read reports that the House Republicans were finally offering a climate bill of their own last week. From what I have heard, their proposal is no more “just right” than the Waxman-Markey bill, appearing to be too little, too late, (as opposed to the Waxman-Markey bill’s too much, too soon). Nonetheless, I am very glad that the Republicans are finally engaging on the climate issue.

Under the guise of addressing GHGs, the two bills do different things. The Democratic bill wrongly tries to re-engineer the economy through energy policy; while the Republican bill fittingly tries to achieve energy independence. Unfortunately, neither bill is likely to reduce GHGs.

But, just as Goldilocks had to pursue a trial-and-error process, so does Congress in its search for that “just right” climate bill that will set in motion GHG reductions at the lowest cost. They obviously haven’t found it yet but having the Republicans constructively engaged in this testing is heartening.

Republican engagement on climate is important for five reasons. First, I believe that climate change is real and this is not whether we do something but that the nations of the world do that “something” in a thoughtful, economic and deliberative way. I believe that Republicans can craft such a plan better than Democrats. Second, barring some dramatic change in the political landscape, eventually there will be legislation addressing GHGs and Republicans would be better off being a part of that parade then run over by it. Third, legislating, and politics in general, is a contact blood sport, and while it appears that victory stems more from numerically superior coalitions of disparate special interest constituencies, victory ultimately comes from superior ideas. So, if Republicans stay in the Uecker seats booing and not fielding a team of climate ideas, there’s no way to win either politically or legislatively.

Another reason for Republican engagement is that key constituency groups, especially businesses with national and international scope, need us. Whether we like it our not, in the absence of national climate legislation, states are undertaking their own climate initiatives - can you say “California?” This trend puts businesses in a growing box of mixed, competing and potentially very costly state-by-state regulation. Preemptive national legislation is their only pathway to rationality and if Republicans aren’t there to help them, then out of desperation they’ll turn to Democrats. That’s not good for them, the nation, or Republicans.

Finally, there are some very important, constructive ideas (like encouraging nuclear power) that will be orphaned if not championed by Republicans.

In sum, constructive Republican engagement and even leadership on the climate issue with our superior ideas, traditional skepticism of governmental solutions, and cautious fiscal sensibilities is what America needs on the climate issue. Hopefully, the recent proposal by House Republicans signals my team’s entrance onto the playing field to bravely test the options…but only settling for the yet-to-be-developed “just right” one.

Prediction--No Climate Bill in 2009: Blame Game Obscures Lessons

It may be premature to predict the demise of federal climate legislation for the year, but I’ll take the risk and do so anyway: the overwhelmingly Democratic Congress will not pass climate legislation this year. This prediction seems to fly in the face of President Obama’s desires, words of congressional leaders, the deceptive “progress” in the U.S. House of Representatives, and candidly, my personal desires.

This makes the blame game for the defeat the next big thing.

Obviously, the Democratic leaders will blame Republicans, business interests who didn’t agree with them, and conservative anti-climate naysayers. Some of this will be accurately placed, but most will simply be political blame game trash-talk. Unfortunately, this blame game and political posturing will obscure the real reasons of the failure and the lessons that could be learned that would result in a bill in 2010 or more likely 2011.

Real reason #1 of congressional failure on climate is that the President’s driving motivation for pursuing climate legislation is to raise revenue. His secondary motive appears to appease his environmental constituencies. The next motivation seems to be to have something, (anything?) for when the world’s climate negotiators meet in Copenhagen in December. Achieving significant GHGs in a low cost way is a distant fourth. These mixed up priorities doomed climate legislation from the beginning.

Real reason #2 of congressional failure on climate is that dealing with GHGs if done wrong can be very, very, very expensive. And, wrong and expensive is how the U.S. House bill seems to be going. Thus, while some banks may be too big to fail, some legislation is too big to not fail. It tries too much, too quickly at too great an expense.

Real reason #3 of congressional failure on climate is that GHGs are a global problem that requires a global solution. An international solution is needed before national solutions will be environmentally effective. Just as it is unwise for a single state or region to unilaterally address their GHGs, no nation (even one as big as the USA) can tackle this issue by itself.

Real reason #4 of congressional failure on climate is that successfully tackling the issue is very, very hard and needs the Congress’ undivided attention. And, that’s just not happening. Besides energy and climate issues, the President is asking the Congress to deal with health care, banking, education, the closing of Gitmo, budget bills, and of course, the nomination of Judge Sotomayer to the Supreme Court. These issues will distract the Congress, preventing it from focusing on the climate.

Real reason #4 of congressional failure on climate is that there are just too many substantive and political balances that need to be achieved. For example, Congressmen Peterson and Walz have already expressed their concerns with the House climate bill because of how it treats ethanol and agriculture. Then there are the balances between the House and Senate.

These are the real reasons that there will be no climate bill this year. Political gamesmanship and special interests may exacerbate these fissures, but they do not cause them. And, there are some lessons to be learned from them:

Lesson #1. The climate bill has to be about reducing GHGs in the easiest, cheapest manner. It cannot be about revenue-raising, appeasing constituents, or “punishing” emitters.

Lesson #2. The Congress should consider taking a deliberative and iterative approach to GHG reductions. First, promote more efficiency; then increase the use of renewables. Third, set a reduction goal; and then building upon these actions take the time to develop the lowest cost, simplest ways to achieve that reduction goal.

Lesson #3. Instead of rushing (and failing) to put together Potemkin climate legislation in advance of the Copenhagen meetings, our national leaders should focus on getting an effective international agreement that includes all the countries of the world. Once that is done, the USA will know what it needs to do and know that other countries will be doing what is necessary.

Lesson #4. If President Obama and the Congress need to recognize that they cannot and ought not do everything at once. They need to set priorities.

I could be wrong. The Congress could still pass climate legislation this year. In which taking credit (instead of blame) becomes the main game. But I doubt it.

Priorities Matter...New Research: Aerosols are Back: Black Carbon and Other Short-Term Pollutants Matter

Last week in NATURE GEOSCIENCES, NASA Climate Modeler Drew Shindell published “Climate Change Cool Ozone” research modeling global warming over the past half century and concluded that aerosols are responsible for half or more of the warming in the Arctic!

He and other scientists say that reducing emissions of black carbon and other short-lived pollutants that contribute to global warming could buy the world crucial time while governments begin the slow overhaul of global energy systems that will be required to reduce emissions of CO2, which comprise 77% of all greenhouse gas emissions.

He also makes a very logical, compelling and understandable argument on anthropogenic global warming.

“The large-scale vertical structure of temperature change in the atmosphere is an important characteristic of the forces driving climate change. Increases in greenhouse gases cause warming in the troposphere but cool the stratosphere. Greater output from the sun similarly warms the troposphere, but causes even greater warming in the stratosphere. Observations show that the troposphere has warmed in recent decades whereas the stratosphere has cooled markedly; this is clear evidence for anthropogenic warming rather than natural warming from the sun.”

In a speech given last week, Secretary of State Hillary Clinton made the following statement:

“Short-term carbon forcers like methane, black carbon, and tropospheric ozone contribute significantly to the warming of the Arctic. Because they are short-lived, they also give us an opportunity to make rapid progress if we limit them.”

For a copy of the complete article:
http://www.nature.com/ngeo/journal/v1/n2/pdf/ngeo115.pdf

An Overheard Conversation On Climate

I was at a coffee shop the other day catching up with an old friend. At a table nearby were some twenty-somethings, obviously old friends themselves, talking about their jobs, careers, politics, and loves. I didn’t pay any attention to them and certainly didn’t want to eavesdrop nor allow their conversation to interfere with my own. Yet, when the topic of climate change came up I couldn’t help but catch snippets.

It started when one said, “Can you believe that Obama’s science advisor says that we should think about shooting particles into the atmosphere to prevent global warming? That’s the dumbest thing I’ve ever heard.”

And, another responded, “Yeah it seems dumb, but the climate change threat is real. Everything’s melting: the polar ice caps, glaciers and lake ice up by Bayfield, everything so we had better do something or we’ll be in a world of hurt and if that’s what it takes then let’s try.”

“You can’t be serious! Yes, the threat is real, but that’s no answer. That’s giving up. We can stop it by eliminating greenhouse gas emissions, using more renewables, efficiency and stuff like that. Obama is already working on plan,” said another.

“Do you really believe it’s a threat?”

“Yes I do. Most scientists do too. Sure, there are uncertainties from the unknowns and unknowable nature of such a complex thing as global climate. But it just makes sense that when you emit a lot of stuff it eventually builds up.”

“I’m not so sure.”

“Even if it’s real, do you think it will be as bad as all that?”

“Not sure, but it seems every news story says we're beyond the tipping point and that we need radical action to prevent a catastrophe.”

“No, seriously, do you really think we’re at a climate tipping point?”

“Do you think that’s possible?”

“Who knows for sure if we’re at a tipping point or not. Maybe we are; maybe we aren’t. I hope we’re not.”

“And, if we are at or beyond the tipping point?”

“All this tipping point stuff is talk from the radical environmentalists wanting to scare people into action. But I think it’s back firing…”

“If we’re tipping, forget about stopping emissions, we should spend our time figuring out how to mitigate the affects and fast.”

“We’re doomed. No more polar bears; starvation; wars over water; It’ll be Mad Max stuff. I’m going to be rich because I’m going to plant corn up in Hudson Bay.”

“Come on. We’re having a serious conversation here.”

“Real or not, I’ll tell you I have no confidence in the Obama plan.”

“Yeah, it seems too little too late.”

“I’m excited about the Obama plan…it means lots of money for renewables and I want to get a piece of that action.”

“Nice: we’re doomed and all you can think about is yourself. We’ve already ruined the planet; the planet’s warming and there’s nothing we can do to stop it. So, I’m glad the Obama-guy is thinking about that kind of stuff. It’s the only thing that might save us.”

“No way! Even if it was a good plan, other countries like China won’t take any action…so it doesn’t matter what we do. So why should we take that pain if no one else will?”

“It doesn’t have to be painful. If we do it right…and I’m not saying Obama is doing it right…but I am saying that it can be done and done in a way that we all don’t have to go Amish.”

“You’re right we can’t wreck our economy to save it…look at what’s been going on over the last year. I can tell you, I care more about keeping my job than the climate right now.”

“Me too.”

“It may be that; but I’m more concerned that it seems to be more about raising money than reducing emissions. And, worse, it seems very partisan or more importantly it doesn’t seem to have widespread political support.”

“Amen, if anyone thinks that we can address greenhouse gas emissions without everyone on board is kidding themselves.”

“See, we’re doomed. Maybe I can play the Mel Gibson role.”

“You’re more likely to play Sponge-Bob.”

“You can’t be serious about expecting a climate bill to be bipartisan? The Republicans don’t even believe climate change is real, let alone are willing to do anything about it.”

“Yes, I’m serious, addressing climate change not only needs to be bipartisan but international too. Unlike anything else we’ve ever dealt with climate and greenhouse gas emissions touches all of us and if we’re all not in it together we’ll fail. Besides, there are a number of Republicans who are willing to thoughtfully address climate: McCain, Crist, Pawlenty, Pataki and Arnold.”

“See we’re doomed. The last frog should turn off the stove!”

“Don’t be so negative. We can solve this if we do it right.”

“I hope so.”

Of course, I’ve taken a little literary license (OK a lot of literary license) in telling this conversation. But, it is the kind of conversation that seems to be occurring more and more in coffee shops, in grocery aisles, across dinner tables, in newspapers' op-ed pages and even in committee hearings. It’s also the kind of discussion that we need to have.

Politicians Continue to Demonstrate What Really Matters to Them--Keep their Jobs!

Senate Vote De-Fangs Cap and Trade Approach To Climate Change

The Senate has voted to impose a super-majority requirement on future passage of any bill – including carbon cap-and-trade legislation – that would increase the tax burden on the middle class or boost overall federal revenues, a move that will likely shape the upcoming climate change debate expected later this year. The provision, sponsored by Republican Sen. John Ensign (NV), was unanimously approved April 1. The Senate also overwhelmingly approved a measure blocking the use of a fast-track budget procedure known as reconciliation as a means of passing climate legislation with a simple majority.

On March 31, the Senate approved an amendment from Sen. John Thune (R-SD) declaring that any climate legislation considered by the body must decrease GHG emissions “without increasing electricity or gasoline prices.” A “clarifying” amendment offered by Environment & Public Works Committee Chairwoman Barbara Boxer (D-CA) softens the language somewhat by suggesting the Senate may consider legislation that doesn’t increase the economic burden on consumers “through the use of revenues and policies provided in such legislation.”

I do not know why I waste my time railing against Cap and Trade and other foolish government ideas when I know they have no courage to do anything controversial.

Shared Goal; Differences of Approach.

Below is a statement I presented over 10 years ago. While I would make some editorial nods towards recent achievements, (the RPS, increases in biofuels and greater emphasis on energy efficiency), I still firmly agree with this statement. Climate change is real; human emissions are the cause; and we need a fair and comprehensive approach that will actually reduce GHGs. Any criticism offered in these postings should not be interpreted as changes to my long-held beliefs or a wavering of my commitment to address GHGs; rather they stem from legitimate differences of opinion for how to craft a fair comprehensive approach that will effectively, efficiently and economically reduce GHGs around the world, across the nation and here in Minnesota.

CLIMATE CHANGE STATEMENT BY
EDWARD A. GARVEY, CHAIR
MINNESOTA PUBLIC UTILITIES COMMISSION
BEFORE THE
MINNESOTA ENVIRONMENTAL QUALITY BOARD

Thursday, December 17, 1998

Although there are uncertainties, climate change poses a real environmental threat and raises very important long-range public policy issues for Minnesota that will not go away. Therefore, it is in Minnesota’s best interest to develop a thoughtful and comprehensive plan to proactively address the issue.

Before I proceed, I have to make two disclaimers. First, although I am Chair of the Minnesota Public Utilities Commission, the opinions I express today are my own. They do not reflect the views or opinions of the Commission or anyone else for that matter. Second, nothing I say today should be construed in any way and by any party as an indication of how I may decide any matter that is before or could come before the Commission.

I accept conventional scientific thinking that the climate change issue is a real environmental threat. The concentration of atmospheric CO2 is increasing. Increased concentrations of atmospheric CO2 is likely to change the world’s climate posing a significant threat to Minnesota, the United States and the global community. Having said that, I recognize that there are many important unanswered questions: How much will the climate change? How fast could such change occur? What will be the impact of that change? Can we see such change today? How significant are human actions in causing such change?

Although no one can answer these questions with great certainty, there does appear to be a correlation between increased CO2 concentrations and human industrialization. This correlation by itself leads me to conclude that the responsible thing to do is to find ways to reduce CO2 emissions. Minnesotans contribute to the problem and will be adversely affected by a changing climate. Therefore, it is in our best interest to thoughtfully and proactively reduce our CO2 emissions in ways that do not unilaterally disadvantage us.

Besides the environmental threat posed by increased atmospheric CO2 concentrations, there is another reason for Minnesota to be proactive on this issue: it is likely that Minnesota will face the imposition of international and national CO2 reduction regulations in the not too distant future. In 1992, at the Earth Summit in Rio de Janeiro, Brazil, 154 countries, including the United States, recognized (and now 175 countries recognize) the threat posed by increasing atmospheric concentrations of CO2 to the Earth’s climate. They agreed to pursue voluntary reductions of CO2 emissions. After several intervening meetings, they went a step further a year ago in Kyoto, Japan. The Kyoto Protocol, which the US signed during the Buenos Aires Convention this past November, creates an international framework for mandatory CO2 emission reductions for developed countries. Under this framework, the United States agreed to reduce its CO2 emissions by 7% from 1990 levels during the 2008 to 2012 time period.

I attended last month’s Buenos Aires Convention representing the National Association of Regulatory Utility Commissioners. The primary agenda of that convention was to address the Kyoto Protocol’s flaws and resolve its many implementation issues. The lack of CO2 reduction commitments by developing countries, like China, is a major flaw of the Kyoto Protocol. The diplomats tried to address this issue but achieved little if any direct progress. However, there was a lot of maneuvering and discussion between the countries, led by Argentina, giving me hope that the stalemate can be broken.

As for implementation, the diplomats spent many hours trying to agree on how to implement CO2 trading and other flexibility measures. Such flexibility is needed to minimize the costs of CO2 reductions. Again, due to international politics there was little direct progress. However, the conferees did agree on a workplan with results to be brought forward in October 2000.

Although there was little formal progress in Buenos Aires, we should take note that the on-going international stalemate is over how to develop and implement CO2 reduction efforts, not whether we need to do so. The science of climate change was not questioned.

This observation makes clear to me that we Minnesotans ought not be ostriches hiding our head in the sand hoping that the climate change issue will go away. It will not; the issue and its ramifications will only grow. Therefore, it makes sense for Minnesota to get ahead of the curve and control our future by developing a thoughtful and comprehensive plan to proactively address the climate change issue. New Jersey and Oregon have done so. So have a number of major Minnesota companies. We should too.

In making this recommendation, I do not believe that Minnesota can solve this global problem by itself. Nor do I think that we should try and thereby shoot ourselves in the foot economically. But, in small ways, we can lessen the environmental threat and prepare ourselves for what is to come.

In developing a proactive plan, it ought to be comprehensive, thoughtful and deliberative. Because everyone uses energy and thereby contributes to the problem, everyone must be made part of the solution. Accordingly, an inclusive process that assures that all interested people can and do participate is needed. Also, no one industry or economic sector should bear the costs of addressing this threat by themselves. The costs of CO2 reduction should to be borne fairly by all.

We need to be mindful of the uncertainties and make sure that whatever steps we take do not unilaterally disadvantage us. We cannot solve this problem overnight and it is counterproductive to try. Today’s solutions should not become tomorrow’s problems. Similarly, we must think creatively. It will probably take new and different ways of doing things to address this issue.

Finally, we must be proactive. We must set goals and take action by pursuing the low hanging fruit while simultaneously planting trees--both figuratively and literally speaking--so we can reap them as they mature in the future. Here are just a few ideas that come to my mind: devising ways to assure that companies that reduce their CO2 emissions receive credit for their good work; striving to achieve even more energy efficiencies; examining our tax structure to find ways to promote capital stock turnover; continuing to use and promote low or no-CO2 emitting energy sources; managing our forest and agricultural lands for carbon sink potential; and finally examining our regulations to make sure that they do not work at cross purposes or unnecessarily add costs.

Although reducing CO2 emissions is key, the cure must not be worse than the illness. We must not take actions that would unilaterally disadvantage our citizenry or industries. Instead, we should focus on flexible market-based measures that strengthens the state’s economy both today and tomorrow.

To conclude, climate change is a real environmental threat posing difficult public policy choices. The sooner we develop a thoughtful comprehensive plan that identifies those policy choices and proactively implements them, the better off Minnesota will be. Thank you for this opportunity to address you today.