America’s New Energy Policy
Wirtschaftsrat Deutschland
Berlin, 13 Februar 2009
Charge d‘Affaires John M. Koenig

Professor Lauk, Herr Henke, Professor Sinn,
Ladies and gentlemen,

Thank you for the opportunity to join you this evening.  Your theme of energy und environmental policy is an important one and is of great importance to President Obama.  At this time of great challenges for America, he has said, and I quote, “There is no single issue as fundamental to our future.  It is one of the most serious threats that our nation faces.”  Indeed, the President has expressly identified climate and energy as one of the three top priorities of his administration, the others being the economic crisis and the wars in Iraq and Afghanistan.

The President has explained many times why he feels this way.  First, energy dependence affects both national and economic security. Reliance on foreign sources of oil and gas compromises our national security.  Indirectly, it bankrolls dictators, pays for nuclear proliferation, and funds terrorism.  Reliance on foreign sources of oil and gas also puts us at the mercy of shifting gas prices, stifles innovation, and sets back our ability to compete.

These urgent dangers are compounded by the long-term threat of climate change. President Obama believes that we dare not underestimate the urgency of the global climate crisis, or ignore the science behind it.  Our scientists indeed tell us, and emphatically, that we are warming the planet at an unsustainable rate.  Unrestrained global warming will cause vast and potentially catastrophic damage to our environment, our economy, and our national security.  Containing climate change will require nothing less than transforming the global economy from a high-carbon to a low-carbon energy base.  But done right, this can free us in large part from our dependence on foreign oil while driving economic growth. 

During his campaign, President Obama vowed that it would be the policy of his administration to reverse America’s dependence on oil while building a new energy economy.  He did not promise a quick fix.   No single technology or set of regulations will get the job done.  The task ahead is one of enormous complexity and magnitude.  As Germany has shown, however, it is possible to deal with the climate crisis while generating growth and creating economic opportunity and new jobs.

The broad goals of the U.S. administration’s energy plan include the creation of five million new jobs by strategically investing $150 billion over the next ten years in a clean energy future.   According to this plan, by 2015, one million plug-in hybrid cars will be on the road in the United States.  By 2012, ten percent of America’s electricity will come from renewable sources.  By 2025, that amount will increase to 25 percent. An economy-wide cap-and-trade program to reduce greenhouse gas emissions by 80 percent will be implemented by 2050.

Within his first week in office, President Obama started enacting some elements of his energy and climate plan.  He directed federal regulators to move swiftly on an application by California and 13 other states to set strict automobile emission and fuel efficiency standards.  He also directed the Transportation Department to quickly finalize interim nationwide regulations requiring the automobile industry to increase fuel efficiency standards, in compliance with a law passed in 2007.  To avoid losing another year, the temporary regulations will be completed by next month to give automakers enough time to retool vehicles sold in 2011.  President Obama also ordered federal departments and agencies to find new ways to save energy and be more environmentally friendly. 

In addition, a number of elements in President Obama’s $825 billion economic stimulus plan are intended to create jobs in the fast growing renewable energy industry. These long-term investments in renewable energy will, as the President says, be a down payment on America’s future.  The package has just been passed by the Congress and will soon be on the President’s desk for signature.

Enacting these domestic measures will require political will and a bipartisan commitment – both at the federal and state levels. 

The Republican Governor of California, Arnold Schwarzenegger, welcomed President Obama's directive to the Environmental Protection Agency to reconsider whether to grant his state a waiver to regulate car emissions. With this announcement, less than a week into his administration, Schwarzenegger said, “It is clear that we now have a strong ally in the White House.”   Allowing California and other states to aggressively reduce their own harmful vehicle tailpipe emissions is an historic win for clean air and for millions of Americans who want more fuel-efficient, environmentally friendly cars.

In Washington, congressional leaders have also declared their intent to work with President Obama to quickly pass comprehensive climate and energy legislation this year.  Already, the White House and Congress are working on a joint timetable to pass a broad climate change bill.

This is essential because – historically -- the United States  has been the largest historic emitter of greenhouse gases. We can only expect to lead abroad if we are prepared to accept responsibility for the impact of our economy on the environment and act decisively at home.

Eighty percent of greenhouse gas emissions, however, are produced outside the United States.  A rapidly growing percentage is produced in emerging market countries. This means that we can only meet the climate challenge with a response that is genuinely global.  As we take ambitious steps at home, we will also vigorously pursue negotiations within the United Nations and at the regional and bilateral levels to enact binding international climate agreements.  No solution is feasible unless all major emitting nations join together and play an important part. This effort will require discipline and sustained attention at the highest levels.

To that end, President Obama has sent an unequivocal message by appointing Todd Stern as his Special Envoy for Climate Change.  The Special Envoy will serve as a principal advisor to the President on international climate policy and strategy and will be the Administration’s chief climate negotiator at the United Nations, as well as other multilateral and bilateral forums.  Because the main cause of climate change is the burning of fossil fuel, the solution rests with our ability to shift the global economy from a high to a low carbon energy base.  Mr. Stern will be a lead participant in the development of worldwide climate and clean energy policy. He will participate in all energy-related policy discussions that, across our government, can have an impact on carbon emissions, and will be looking for opportunities to forge working alliances with both domestic and international partners. 
 
To meet our energy and climate goals, we will need partnerships and joint ventures between countries, collaborations between governments and the private sector, new technology and new financing.  In that respect, Germany and the United States are ideal partners. 

German technology and expertise in alternative energy is highly respected around the world.  Last October, Solar World, a German company, opened the largest solar cell factory in the world in Hillsboro, Oregon.  In New Mexico, the German firm Schott Solar, a global leader in solar energy, invested 100 million dollars in a factory in Albuquerque.

At least ten solar plants founded by North American firms are currently being constructed in Germany or will shortly begin producing solar modules. Total investment in 2005 and 2006 amounted to far more than 300 million euros. Some 3,500 German jobs have been created by North American renewable energy businesses. 

I am confident that in the coming years, American and German technology will play a major role in the transformation of our economies.  Together Germany and the United States can be partners in the most dramatic transformation the world has seen since the reconstruction of Europe in the postwar years.   It is no secret that we face a very serious economic crisis.   The world has arrived at a crossroads.   This is a time of great challenge.   There is a need for urgent, immediate action.   We have a new President in office, whose very election underscores America’s capacity for change and renewal. 

In the past ten days, we have seen a number of important meetings between our two governments.  Foreign Minister Steinmeier met with Secretary of State Clinton in Washington.  Vice President Biden, National Security Adviser Jones, Deputy Secretary of State Steinberg, and a number of our top diplomats met with their counterparts in Munich last week.  The Obama administration has made it clear that we rely on Germany’s and Europe’s support and assistance to face global challenges together.  And energy and climate will be at the center of those discussions.

We have heard a good deal of concern and speculation over the meaning of Buy American clauses attached to our stimulus plan. President Obama has made it clear that he opposes a protectionist response to the economic downturn. He understands the danger of undermining the very trade that has fostered our mutual prosperity. Buy American legislation on government procurement has, however, existed for many decades, and yet transatlantic trade and investment have boomed. We expect the final version of the stimulus proposal will ensure that any further restrictions on U.S. government procurement are consistent with our WTO and other international obligations. Many nation states, in fact, make some exceptions for government procurement, and the WTO agreement on Government Procurement to which both the United States and Germany are signatories permits such exceptions. I urge all to exercise some patience until the actual legislation is signed by the President. In the meantime, I think it is important to keep in mind the "big picture," namely, that the US recovery package amounts to an enormous stimulus to the world economy.

We are profoundly aware that we – the United States, Europe, and our global partners – face similar challenges and opportunities in this time of crisis.  We will emerge stronger and more quickly from the current global recession if we work closely together to make our priorities not just more productive, but also cleaner and more sustainable.

Thank you all for your initiative and commitment as we move forward together.