Robert Hahn,
Senior Fellow and Executive Director, Regulatory and Market Studies, American Enterprise Institute for Public Policy Research
Andrew Treusch,
Associate Deputy Minister, Environment Canada
Moderator:
Peter Passell, Senior Fellow, Milken Institute; Editor, The Milken Institute Review
As Copenhagen prepares to host the next major United Nations conference on climate change, there is renewed optimism that the Obama administration and a Democratic Congress will spur the United States to take action on controlling emissions. But to succeed, action will have to be coordinated globally, and it will have to involve not just the U.S. and the rest of the developed world but also China, India and other developing nations. And to date, only modest sacrifices have been made.
The panel was largely in agreement that a cap-and-trade system is the best approach to limiting and reducing carbon emissions, but expressed skepticism regarding the auction system of carbon permits being backed by the Obama administration, which would put revenue into hands of politicians in Washington. Robert Hahn of the American Enterprise Institute was highly doubtful that a cap-and-trade bill would pass if it contains an auction component because American industry would not sit idly by and say, "Sure, we'll be happy to give the money to the government."
Neil Eckert of the Climate Exchange solidified the feeling by stating that he prefers cap-and-trade because it generally puts the money outside the hands of the government, which may be tempted to use it for general fund purposes, and straight into financing alternative or clean energy. Andrew Treusch advocated a North American cap-and-trade system, since Canada is so economically tied to the United States; he added that the political will to implement this idea exists.
The panel also weighed in on the desired outcomes from Copenhagen. Eckert suggested setting a global long-term market, establishing a framework for the carbon market as well as providing certainty by mapping out its future. This will involve understanding that China will come to the table — but via the corporate route rather than the governmental route — and setting achievable targets.
On the topic of how to bring developing countries — specifically China, India, Brazil, Russia and Indonesia — into the fold, the panel agreed that a system of functioning, verifiable offsets are a key prerequisite. These would drastically reduce the cost of a carbon-trading system, but to work, they need a mechanism for standardized and demonstrable standards.
The discussion then turned beyond emissions controls and toward dealing with the actual effects of global warming. Do we have ways to cope? Hahn noted the obvious need to adapt but furthered that we have no idea about the costs of that process. Treusch reported that since 2oC or more is already expected, Canada is preparing for rising ocean levels, a reduction in permafrost and changes in agriculture. Eckert stressed that "we need every tool in the box." He also believes that some form of emergency liquidity would be extremely helpful. Any progress is positive but we need financial and physical adaptation, sea walls, carbon markets and taxes, etc., to counteract the threat.
Ivan Gold of Perkins Coie noted that actions taken by individual countries may have collective consequences. He believes there are too many people putting too much stress on natural resources, setting the stage for future conflicts. The panel also added that the poorest nations will be the most adversely affected by climate change, which could have costly and dangerous geopolitical consequences.
Global Conference 2013
Former Prime Minister Tony Blair, philanthropist Bill Gates and Strive Masiyiwa of Econet Wireless discuss advancing prosperity in Africa.
