LAGUNA NIGUEL, Calif.--Absent having a vote in Congress, the best way for people to tackle climate change is to make clean energy cheap, said President Bill Clinton at a green business conference here on Wednesday.
Speaking at the Fortune Brainstorm Green event, Clinton said through the Clinton Climate Initiative philanthropy, he is involved in a number of projects which show how environmental awareness makes sense for business.
Successful sustainability efforts help provide the political leverage for passing climate change regulations in the U.S., and internationally, Clinton argued.
Former President Bill Clinton speaking at the Fortune Brainstorm Green conference.
(Credit: Martin LaMonica/CNET)The House this week is having hearings on a energy and climate bill that could pass this year, but faces a less certain path in the Senate. Next year, international negotiations on climate change are set to resume in Copenhagen with the purpose of crafting a successor to the Kyoto Protocol.
"The most important thing you can do, unless you have a vote in the U.S. Congress or a seat at the table in the Copenhagen conference is to prove the transformation we are all committed to undertaking is or can be made good economics," Clinton said.
Clinton is involved in projects that touch health and the environment, such as investments in making building more energy efficient or getting energy from landfills. The Empire State Building, for example, earlier this month announced a $33 million energy-efficiency retrofit that will save the owners $4.5 million a year on electricity and pay back the initial investment in under eight years.
Doing this sort of working in developing countries would have a significant impact both on greenhouse gas emissions and on the global economy, he said.
"If I could do just one thing and had the money to do it, I'd do this, I'd do this energy work in countries at middle- and low-income level," Clinton said.
"I am convinced if we do this energy thing right, it will generate not only an enormous number of new jobs and economic prosperity for countries of every income level, it will cause people to re-imagine how they do everything and therefore, the funds will flow to health care and education," he said.
The financing challenge
Even with his confidence in green businesses, Clinton said the details of carbon regulations are still very important. The debate among staffers right now seems to be over how pollution permits will be allocated in a cap-and-trade system--either by giving them to large businesses or by auctioning them off.
His policy recommendations were in line with many of the proposals being discussed in Washington, including a national renewable energy mandate and construction of more transmission lines to move wind and solar energy to demand centers. Changing the federal auto fleet to plug-in electric and hybrid vehicles and mandating energy efficient lighting would help establish those industries.
He said if states resist "decoupling" regulations that give utilities an incentive to be energy efficient, the federal government should mandate it.
Apart from a climate change policy that puts a price on carbon emissions, the biggest barrier to wide adoption of existing green technologies is financing.
The C40 Cities project, working with the Clinton Climate Initiative, sought to secure money from banks for energy service companies to weatherize large numbers of buildings. The energy savings from these retrofits help deliver a return on investments but the economic crisis has derailed some of those projects.
Clinton argued that new financing models need to be developed for environmental projects. Investment banks secure 20- or 25-year financing for construction of coal power plants. Yet cities that want to tap the methane gases coming off landfills to make electricity don't have the same options, he said.
The initiative is involved in a number of projects, including methane-to-energy or smaller scale projects like one in India where people scavenge organic material to make compost fertilizer for farms.
"I'll make you a prediction. I think people in our business will spend more and more time on what to do about urban waste over the next five years because it's a terrific source of new energy and energy efficiency and advances against climate change. It's like so many of these things, it requires the cash up-front," he said.
In addition to solving global problems like climate change, environmental sustainability projects are powerful symbols, Clinton said. Places with lots of sun resources like Arizona and Nevada, which were hit hard by the real estate crisis, could be "virtually energy independent," but people need to see real examples before making bold moves.
"I think symbols are important. The evidence of success spurs people to take new risks and make new investments," he said.
Updated at 8:15 a.m. PDT to change references to the Clinton Climate Initiative rather than the Clinton Global Initiative.
LAGUNA NIGUEL, Calif.--Despite formidable political challenges, the United States has a good chance of passing legislation to regulate greenhouse gas emissions in the next nine to 12 months, energy industry experts said here on Monday.
The critical factor to passing climate change laws is managing the transition to low-carbon energy sources without sharply raising prices for consumers, said panelists at the Fortune Brainstorm Green conference.
The House on Tuesday will begin hearings on an energy and climate bill its sponsors hope to pass this summer. The Environmental Protection Agency on Friday issued a preliminary finding that greenhouse gas could be regulated under the Clean Air Act because they pose a threat to public health and safety.
These developments make it more likely than in previous years that rules to put a price on emitting carbon dioxide in the U.S. will be put in place. If they take hold, it would be a turning point for the U.S. economy, creating the financial foundation for sustainable and green technologies, said William Bumpers, the chair of the climate change practice at law firm Baker Botts.
"If enacted and implemented, 20 years from now we'll look down the road and see this is as the most important piece of legislation in the history of the country," said Bumpers. "It has truly transformational potential."
On the panel were energy industry executives who are lobbying for quick enactment of carbon regulations, which would be phased in over the next five years. They included Jim Rogers, the CEO of utility Duke Energy, and NRG Energy CEO David Crane, a power generation company that relies primarily on fossil fuels.
Despite the support in some quarters, climate change laws are opposed by some business leaders and politicians, particularly from states in the South and Midwest that rely heavily on coal for power generation. As such, even if the House passes a bill this year, it faces a tough road in the Senate.
That's why negotiating the details of a "transition period" between now and a future low-carbon economy are so crucial, panelists said.
"We can keep the costs to households to pennies a day," said panelist Fred Krupp, the president of Environmental Defense Fund. "We can limit the costs to very manageable levels if we do it right. I think the equitable thing to do is to have a transition."
Handicapping Washington and carbon: From left Marc Gunther of Fortune, Environmental Defense Fund President Fred Krupp, NRG Energy CEO David Crane, William Bumpers of law firm Baker Botts, Applied Materials CEO Michael Splinter, and Duke Energy CEO James Rogers.
(Credit: Martin LaMonica/CNET)Businesses typically favor a cap-and-trade system, rather than a straight carbon tax. With a cap-and-trade system, big polluters such as utilities and cement manufacturers purchase or are given permits to emit carbon. Permits can be traded among participants to stay under an emissions limit--the cap--established by government.
Up for debate are how many of those permits are given away, rather than auctioned off. The House bill, for example, calls for giving away permits to heavy polluting industries in an effort to keep them competitive internationally.
Panelists said that a legislative approach to regulating carbon emissions is better than having the EPA regulate them under the Clean Air Act because Congress can better deal with the complexity of the situation. The Obama administration, too, prefers "comprehensive legislation" over regulation by the EPA.
Best or last chance?
It's important to establish a price on carbon emissions because large businesses are waiting for a "price signal" before they make investments in low-carbon technologies, Krupp said.
Once that price is in place, a utility that relies heavily on coal, for example, will invest in renewable energy or technology to store carbon dioxide underground. That also helps create jobs for people in clean-energy industries, Krupp added.
In cap-and-trade proposals in general, there is a long-term horizon for emissions target reductions--the House bill targets an 83 percent decrease in carbon emissions compared with 2005 levels by 2050.
Because of that time scale, a utility can upgrade its power generation facilities around cleaner forms of energy and efficiency and address the "carbon issue" at the same time, said Duke's Rogers.
"The fact is that electricity prices will go up anyway as we retire and replace power generation so why not address this environmental issue at the same time," he said.
"The key is to smooth out the cost increases as much as possible, to help the business plan, and help us use electricity more efficiently," he said.
Successfully managing the transition to minimize or eliminate cost increases on consumers is important to get right in the coming year, Bumpers said. Otherwise, carbon regulations will be set back years.
"Businesses will have an obligation to deal with a capital commitment over the next 30 years that is unprecedented," Bumpers said. "If we don't manage this transition by mitigating cost impacts...there could be political backlash because prices have gone too high too quickly...Those trillions of dollars of investments will turn out to be bad investments."
- prev
- 1
- next
