Taking Advantage of Innovation, Technology, and Investment to Address Climate Change and Grow Economies
Ambassador William R. Timken, Jr.
Berlin, Atlantik Bruecke
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| Ambassador Timken |
This evening, I’d like to discuss what the United States is doing about climate change, what we have been doing, and what we can do better together. I can’t think of a better forum than the Atlantik-Brücke. As an organization, you have demonstrated your commitment to fostering transatlantic understanding, many times over. On behalf of the Embassy of the United States, I would like to thank Dr. Lindemann and all the people associated with the Atlantic Brücke.
This is an extraordinary time in the German-American relationship. As some of us were discussing a few moments ago, we’ve had a constant stream of visitors here from the United States and seen a constant stream of people from the German government going to the United States. Today, Secretary of State Rice is here. This is her second trip to the Middle East within the last month. On both occasions, let me note that she has come here to Berlin to meet with the Chancellor and Foreign Minister Steinmeier before she even went back to report to the President of the United States. To me that is symbolic of the relationship that has developed. Our two countries are working together as never before to deal with global challenges. I see it because I attend so many minister-to-minister meetings and hear the dialogues that go on, just as in the meeting today with the Foreign Minister. This is truly a great thing for both of our countries – and, I believe, the world. Germany is providing exceptional leadership to the European Union and to the G8. One of the goals that Chancellor Merkel has set for the German EU presidency is to advance new technologies to promote energy efficiency and environmental protection.
That was one of the issues that the President and the Chancellor discussed in January at their meeting at the White House in Washington. I have attended all the meetings between the President and the Chancellor to date. Let me say that this was the best one yet. This time, the Chancellor was there speaking for both Germany and the EU.
President Bush and Chancellor Merkel agree that the bottom line in any energy debate is the need to diversify our energy supplies in a cost-effective, environmentally responsible manner. We are on the same page here.
The challenge is to increase the number and variety of clean, reliable, affordable sources of energy around the world. Sustained investment is the key. Both the government and the private sector are massively funding scientific research on new sources of energy and production methods. There are significant technological breakthroughs that will prove that environmental protection and economic growth are not mutually exclusive.
Now I know many people believe that because the United States did not sign the Kyoto Protocol, we are not doing anything at all to reduce greenhouse gas emissions or for that matter, any other form of environmental pollution. I think that these people are confusing means and objectives. The Kyoto Protocol is one means that some nations, but not all, have chosen to achieve their objective of reducing greenhouse gas emissions. There are other ways to proceed. We need multiple approaches to solve this very complex problem.
Let me make it clear: the United States and the Bush Administration are committed to reducing greenhouse gas emissions and combating climate change. We support the recent IPCC report finding that human activity is a major contributor to climate change. American scientists are active members of the panel; and, in fact, the United States paid nearly half the costs of the IPCC research. This reflects our belief that climate change is a serious, long-term challenge that requires sustainable, effective policies. We have made tremendous investments in reducing emissions. We continue to work with domestic and international partners to do so. These efforts are producing results that stand up favorably against any nation in the world. Just because we haven’t joined the Kyoto Protocol, does not make any of these statements less true.
The U.S. approach to climate change, energy efficiency and energy security combines a variety of mandatory, voluntary and incentive-based efforts to stimulate the way we produce and use energy. We have developed specific incentives for the development of new technologies – such as biofuels, fuel cells, and clean coal. We know also that clean, safe nuclear energy must be an essential element of a realistic global greenhouse gas reduction strategy. For that reason, the United States has licensed the first nuclear plant construction in thirty years.
At the same time, we have worked with industry and consumers to develop energy efficiency standards in construction, transportation, and a whole range of day-to-day consumer goods and appliances in the marketplace. By adopting such a flexible approach, we are striving to engage all three hundred million Americans in this great endeavor – not a few, not a few industries, but all three hundred million Americans – and as demonstrated by changing consumer spending habits, it is working.
Our energy strategy brings together the federal government, state governments, local governments, America's private sector and nongovernmental organizations with a clear purpose. That purpose is to develop transformational technologies that will address climate change, reduce our reliance on oil, promote energy security, and reduce environmental pollution.
Tonight I can tell you that the strategy is working. I am not going to go into detail on too many greenhouse gas emission statistics. Last year, Jim Connaughton, Chairman of the Council on Environmental Quality, did just that at another forum here in Berlin. I have provided a handout with real factual information which you can pick up as you leave and study later. These are the facts.
Everyone knows that the United States is currently the number one producer of green house gases. We are, after all, the world’s largest economy. But it’s important to look at trend lines. According to data from the UN Framework Convention on Climate Change, between the years 2000 to 2004 – the most recent period for which we have good, comparative data – U.S. greenhouse gas emissions increased by only 1.3 percent. This is an increase, but a very modest increase and less than the EU-25 emissions growth rate during the same period of 2.1 percent.
Greenhouse gas intensity, which is basically greenhouse emissions per unit of GDP, is, however, a better indicator of what is really happening – and what the future holds. Unlike in Europe, the period of 2000 to 2004 was a time of rapid economic and population growth in the United States. Still, we reduced the greenhouse gas intensity of the U.S. economy during that period by 7.5 percent. How did the EU-25 countries perform on this same measurement with little growth in population or output? Combined, the rate of reduction in greenhouse gas intensity was just a little over half the rate of decrease in the United States. At 4.5 percent, also a good result, good direction, but not as much of a decrease as achieved in the United States.
So how is the United States able to enjoy lower emissions intensity and job producing economic growth at the same time – without signing on to the Kyoto Protocol? The answer is national commitment coupled with cost-competitive, cleaner energy technologies. Since the year 2001, the United States Government has devoted almost $30 billion to climate science, technology, international assistance, and incentive programs related to energy. That is far more than any other country in the world.
Our investment is paying off, but I would readily point out: we are just beginning. Today, energy and climate policies alone cannot drive clean energy markets at the scale or the pace necessary to solidify energy security and stabilize the climate by the year 2050. We must be more creative in deploying new, innovative strategies for low-carbon options in the future. We need to unleash the private sector, not cap it.
The global energy system is the most capital-intensive industry in the world. The costs of transformation will be enormous but the historical experience of innovation in market societies shows us that with every new option in technology, the economy becomes more flexible and efficient. Improving energy efficiency in using fossil fuels though will not be sufficient for achieving climate protection goals.
The transformation that needs to take place will have to be equivalent in scale to the energy-fueled technological transformation of the last 100 years. This was a period that saw a transition from waterwheels, wood, kerosene, and horse-drawn transportation to near-universal electricity networks, the dominance of coal for electric production, millions upon millions of gasoline- and diesel-fueled vehicles, jet travel, and, eventually, the microchip and the digital economy of today. We now need unprecedented, massive innovation to develop low-carbon technologies, to commercialize them, and bring them to the market on a large scale basis. We must make the marketplace work for us on this crucial issue, not restrict it.
Over a century ago, my great-grandfather, a 7-year old immigrant from Germany, took a risk (not when he was seven, a little later) and transformed his business in horse-drawn carriages into the automobile industry. He invented and sold the first axle equipped with tapered roller bearings to an automobile producer in the year 1900. His invention and the company he established were a part of the technological revolution of the last century. He saw the elimination of friction as an overwhelming way to conserve energy. Over one hundred years later, the Timken Company still produces roller bearings for cars, but also for wind turbines and any other number of other applications, many of which are part of the clean fuels revolution.
The roller bearing industry as a whole plays a major role in energy efficiency in almost every manufacturing industry in the world. Additional innovation improved the results. Today a typical bearing today reduces the frictional energy waste by more than 50 percent when compared to 50 years ago. The savings in fuel and energy consumption are enormous. There are a lot of business opportunities out there – in many industries, including the automobile sector. Today’s higher prices are accelerating users’ desires for more efficiency. The free market is doing its part. From my knowledge, I also know how greatly the jet engines used by our commercial aircraft have improved in their own effectiveness and efficiency just to get to where we are today. We have to move them forward. Great advances are continually being made.
Seven-eighths of the world's population does not own an automobile – today. Car ownership statistics in China and Africa are about what they were in America in 1915. To satisfy that market as well as our own without adding a heavy burden to the environment, we will need better vehicles. Four million new cars are expected to be sold in China alone over the next few years. These are huge number of new vehicles – and a huge opportunity to address energy efficiency.
The EU has introduced new automobile efficiency standards. In his State of the Union Address in January, President Bush also addressed this topic. We have already had standards, but the President outlined an additional strategy to reduce gasoline usage in the United States by 20 percent in one decade – or 20 in 10, as he put it. The plan sets new targets in fuel efficiency standards for automobiles – compulsory measures – that will force technological development. It also rapidly accelerates the deployment of new renewable fuels. The measures announced in the State of the Union could cut annual carbon dioxide emissions by 10 percent by 2017. This would be the equivalent of taking 26 million automobiles off the road today.
It is very clear that, in the 21st century, the global demand for energy will rise rapidly. Demand simply goes along with economic growth. Economic growth in turn is vital to maintaining and raising our standards of living. The challenge is to make our economies cleaner even as they grow. In the developing world, new growth and human development is literally a matter of life and death. We are all currently giving billions of dollars of help to countries in Africa, Asia and Latin America to reduce poverty, to improve education and health conditions, and to protect the environment. But aid is not enough. The only way for these countries to advance is through economic growth and opportunity. Yet, these regions also include some of the greatest emitters of greenhouse gases. Overall, the carbon dioxide emissions from non-OECD countries will top those from OECD countries by the year 2010. By the year 2009, China is expected to exceed the United States as the largest greenhouse gas emitter.
In China, for example, it is estimated that a new coal plant is built at the rate of one per week. For the most part, these are out-dated, old technology, not state of the art, highly efficient plants. The United States is trying to change this situation. Last year, we started the Asia Pacific Partnership on Clean Development and Climate, APP for short. It is designed to bring China, India, Japan, South Korea and Australia together with the United States to tackle complementary energy, economic and environmental goals. These partnership countries account for 50 percent of the global population, 50 percent of the global economy, and 50 percent of the energy use. An example of an APP success story was China’s recent decision to purchase 60 methane-gas-powered generator sets from the Caterpillar Company to capture the gas in methane and convert it into power. These state-of-the-art machines will reduce greenhouse gas emissions by 4.5 million tons over a 20-year period while improving the electrical capacity of the Chinese power grid.
In just six months, APP task forces have developed almost 100 projects that will deliver the multiple benefits of reduced greenhouse gas emission, cleaner air quality, and reduced poverty levels. This growth-based approach to reduced emissions is appealing. Simply shifting our emissions problems to other parts of the world creates a false sense of achievement. China and India’s active engagement underscores the importance of involving these two countries, and others, in any real solution to the climate change challenge. I am proud of our efforts in Asia.
This is an example of how we can engage China and India in the global debate on climate change. There are tremendous opportunities for the United States, Germany, and the rest of Europe to lead in this area through our own investment in clean energy. Innovation offers the best path to bold, new energy solutions. Our private sectors have long been the most dynamic sectors for investment and innovation. Companies are realizing that they can make money in alternative energy businesses and are rushing to do so. By mobilizing venture capital investments on both sides of the Atlantic to work together to develop clean technologies, we can lead the way to a brighter future for the entire world.
The role of government is to facilitate a quick and aggressive transition to these alternatives. The world awaits our technological innovations.
Let me conclude by again emphasizing America’s commitment to the objective of cutting greenhouse gas emissions. Our policies and actions are producing good, concrete results. We are cutting the growth rate of emissions in a way that also favors human development. We are working with partners around the world. We are eager to go further under the German EU and G8 Presidencies. I’m sure you know we are working today on strategies to bring forth at the April 30th U.S.-EU summit in Washington and the G8 this summer. The United States has a stake in international cooperation on energy-technology innovation.
The bottom line is this: Slow the growth of emissions significantly, then stop it, and finally reverse it. If we work together, if we promote the understanding and collaboration at which our transatlantic partnership excels, we will succeed.
There are tremendous opportunities for the U.S., Germany, and the rest of Europe, to lead in this area through investment in clean energy. Innovation offers the best path to bold, new energy solutions and our private sectors have long been the most dynamic sectors for investment and innovation. We believe this will continue. Thank you very much.
