Title: Panel Discussion - UN Climate Change Conference: Implications for Domestic Energy Policy, Copenhagen, and Beyond

" They keep coming. This is one of the first events of energy futures weak and from the turnout it bodes well that the week is gonna go well. So I think you offer coming thank you offer contrast in energy and climate. On behalf of them ninety energy initiative mighty and the energy club where thrilled to have these. Members of the Boston community you are really at the top of this field com here tonight said to talk and give their opinions on. On what's going on in the climate change. Arena and having to do with policy and the implications for domestic energy policy. Before we start I'd like to ask you all to turn off your cellphones. And also like to ask you all to close your laptops if you have them open. Every event for that energy club we asked you to follow professional standards so respect others who are asking questions respect the panelists. And respect yourself. Without further ado I would like to introduce Travis frank Travis is a graduate student here at MIT and T actually was at -- non. Back in December so he's going to kick it off with a little bit of background about what's going on and I think really offers a unique point of view. Firsthand. Of what's going on so welcome. Doing good evening."

" So tonight's topic hello I'm Travis frank. And I -- program Ph.D. Simon Ph.D. candidate in the joint program on science and policy of global change which is a research laboratory. Here MIT and we do integrated. Analysis of climate change but the science and economics. I work particularly on coastal adaptation research so what -- how coastal communities we affected by climate change. But we're talking about here tonight is -- not. And the UN process so I was Spence the second week -- non in post on Poland which isn't mid December. -- it is it large conference folk country negotiating teams. Ngos which thousands and thousands of people that swamped the city for its largest international events ever. I think we took up every hotel room and from inside like the city limits and spilled out into the neighboring communities. -- with some people driving thirty minutes every day just in this city conferences. So my role here tonight will be to moderates and solves give a short introduction. Two. The UN process and framework that we're all discussing. And and also took questions so first I'd like to chairs the panel. And I'm gonna get online and just have them give their name and their position and maybe a short description of what their jobs it's it's."

" So I'm John Parsons on the executive director of the joint program that Travis was talking about an economist in the Sloan School. So no really diplomatic expert or anything about what perhaps -- from hasn't informed citizen."

" Robert Stowe London manager of the art project on international climate agreement which attempts to identify it. Communicate alternative our captions for the next agreement."

" I'm getting back after a professor of economics at Tufts University. I also worked closely with. My colleagues that the to a program on science policy change and --"

" I'm down my eyes and associate director sort of stood. That's not my appointment from the book. I guess -- working on this topic -- Almost thirty years ago. And seem to come a long way to -- for the world."

" Thank you. So what I'm going to be talking I wrote really. Right now is just give you short introduction to what's called the United Nations framework convention on climate change UN SEC's. And this is why post on exists. And every year towards the last month picture of the year there's an annual meeting called a cop -- conference of the parties. And in which occurs as opposed Obama's top fourteen. And at the conference of the parties -- date. -- a meeting of the parties the United Nations framework convention on climate change which is a treaty signed by bush senior. And -- 5% in 1992. And by UN convention. -- is now now is often called my managers is labeled and popular press as the earth summit. And there is we go back all the way to 1992 days. Everything that we're doing today we're meeting why remand in Poland. December and why remind me Copenhagen this December. It is because of the previous treaty. And that -- laid out principles. Four. The nations agreed upon that a climate. Climate action kind of policy -- A poll in those two important trip articles and that treaty one has -- of two. It says that we should stabilize. Atmospheric concentrations of greenhouse gases to prevent dangerous. -- climatic change. And the second article which is very important when we start talking about negotiations. Discusses that we should have common but differentiated responsibilities. And -- states that. That countries. Who are rich and have a -- you two and carbon dioxide in the past and their responsibilities in those countries that are still developing or countries that. Her economically not as well. So those two. Principles are in the roots. Document treaty that all of these other means you know meetings on our. Are held to discuss. And so what are the other means for yet a meeting therefore. Actually making priest meets on the boats on -- treaty that came out of Rio de Janeiro. Only outline principles that not -- actions so fast forward have a couple these annual meetings after 1992. And -- the third meeting in 1997. In Kyoto Japan there's something called the Kyoto protocol. Which if you're going climate change that's. But for video record and this is the first attempt to take. Agreement of action. For the climate change in the climate problem. That was eventually ratified after years of negotiations on -- race. When Russia finally signed on and even 2005. And and this is what a lot of the nations of the world are actually made if any nation is taking action many of them are taking -- protocol. I'm which tells people cement. I think this -- global emissions five. -- percent below 1990 -- for those countries that are. In a particular set of countries and those are only developed countries mainly in the CD and it's the only DOE CD countries that have. Ratified Kyoto protocol. On in 2001 Bush Administration said that the US had not -- effectively killed it protocol. Com and so now we have the situation where today which is we have some people. Moving forward with an international agreements. We have some people who were part of the international treaty -- summits but not part of the current international action plan of care protocol. It's an hour trying to have a round of negotiations. To bring everyone the same page or maybe their some of -- says maybe it's not to have everyone on the same page but still move forward with more tight. Com. National voice on clock so the most recent negotiations. It was last year sorry. To December's go to -- there's the Bali action plan that was the -- thirteen meetings and Morgan negotiations in the conference of the parties. And there they set up again smart principles Phelps set a timeline for coming up with another protocol that would be the a follow on to beat -- and hopefully people are hoping that this next December in Copenhagen. On the according to file action plan that's when they're going to happen in next treaty that will again. Proposed actions to date it's changed suppose not with an intra meeting between the volley meaning and Copenhagen. Between now and Copenhagen there's going to be a series of working groups that are being held by the UN and that sort of a treaty and some that negotiations so and say we're going to be discussing what post not means that the outcome of the last. Conference of the parties. And what that means for domestic policy what that means for Copenhagen this next upcoming meeting and -- So that I would like to have people. Giving instructions themselves and maybe states in opening remarks."

" get things it was a really great overview for everything. Sowers going to make each of us give a very short piece on something so. What I pick for myself is something about. Letting out a view about. What might happen once and are about what might happen. And what I'm trying to do in laying out his view is you whip certain problems that exist and how we go forward. But I'm an eternal optimist about things and I'm an fashion out something which I think it then eight different view about how we can afford possibly. We face the problem right at the moment the Copenhagen is less than twelve months away. -- will open question that many people in the world are asking is will the United States have met. To -- cap so some significant commitment to cut emissions. And if it does that would presumably be in the framework of an agreement -- Copenhagen where many countries that are -- You have a whole host of questions that follow from that. We'll."

" China and India in the developing countries. Commit. To doing things. What will be the relationship between these various obligations how we deal -- industrial emissions and agriculture. It's a complicated. Complicated problem. If this administration had been in place. For the last four years of negotiations. That Travis was talking about that were all supposed to be leading up to Copenhagen. It would be a complicated. Complicated problem. But you have a new administration in place. You have less than twelve months to negotiate. To come to an agreement. Committing to binding targets. Is that likely is not going to happen. I think it's. Dangerously unlikely in the way that people typically think about this it's dangerously unlikely that -- yet. A replica of the Kyoto protocol with the United States joining in and several other countries just because there are so many complications. But. I don't think that's the only way things can go for. If you just scroll back a little bit and say geez we didn't sign the Kyoto protocol. And debt. For the last number of years we did have debates in the United States about whether we would have a -- We've had legislation in the Senate. McCain Lieberman Lieberman Warner Lieberman Warner boxer. We -- passed -- we debated we didn't but we could death. We didn't need Kyoto. To take on a cap here in the United States you can do it on -- We would have been following in the footsteps of other countries that -- taking on obligations and taken on caps. And implement them in their own territories. And it would have been a big impetus moving forward. And so what I want it emphasize. Is that there's a certain amount of leeway. Here. For the United States to get its act together all -- Regardless of what happens in coat -- We will have a negotiation and a debate within the United States what kind of a captured we put on. What should -- involve who should do it so on and so court we can do that unilaterally. We can take the first steps unilaterally other countries have already been taking some steps. Then the question comes how does that unilateral action by the United States really -- articulated together. With what is happening on the international stage -- international negotiation. There are lots of ways for that to be articulated together there are. Ways in which you can have. Less formal agreements. As long as they are replicated by -- troops out within the United States. There are also many different types of actions that need to be taken. You got a certain sense of that in sort of overview that Travis was talking about there's a whole apparatus that had to be put in place there are many. Types of actions at an international level. That the United States can engaging cooperatively. And move forward through the UN FCC process. And through negotiation Copenhagen. They can guarantee some. Positive. Motion forward in the international negotiations. That don't have to -- ball. Within the framework of a treaty the United States accepting. An obligation. So so what are trying to argue for is there's a need for us to move forward but we shouldn't get ourselves. Caught up in an assumption. That moving forward -- to be in the form this year at this time right now. A particular form of an obligation. To where it wasn't you don't know if that could happen maybe that would be great. But there are major obstacles to it happening. And instead of charging for work and fighting that fight as it might be an immovable object in an irresistible force there are ways around that conflict. And I just want to suggest that we. Those people who want to argue in favor of the United States taking action. Don't half to assume. That those. That that a lost there the inability to come to a agreement on a tap in. Copenhagen. Would mean. An inability to go forward. There are many reasons why United States has its own peculiar difficulty. Passing treaties. We have this treaty the law -- treaty that was negotiated for many years back in the seventies and eighties. And the United States to this day has not ratified that treaty. Some of the very same people who oppose that treaty have opposed the United States taking on any cap and would oppose. A public that you would just. You're gonna get a hornet's nest of issues about us. Giving up our sovereignty. And surrendering. And what's the other guy doing when you would go around those issues completely. If we take a cap on our own domestically. And we negotiate internationally. On many other issues that need to before. So -- I'm going to stop it and pick up the conversation."

" As as you take it."

" Let me add my thanks Travis -- pre introduction. I would what John said among difficulties. Keeping me and -- Is the economic downturn. Mitigating. Emissions cost money. And it will be harder. Now to achieve -- domestic agreement within the United States. Most likely a cap and trade agreement. Than it would have been otherwise. I also was imposed on. And spoke with members of a lot of delegations -- the members of our group rob Stevens from the Kennedy school. Couple other members of our project to. Accompany us. And everybody is looking for a way out and -- Way out of what the main issue is getting the United States and China on board these two countries account for. Much of the emissions of carbon dioxide. In the world. But neither have obligations under the Kyoto protocol the United States because didn't ratified agreement as John mentioned. In China because it's not an -- one so called index one party one of the group of developed countries that Travis referred to in his remarks. It's essential that whatever the next agreement is that somehow. It gets the United States and China to make commitments. Now it's highly unlikely. And it's unlikely in the extreme that China would take on or read to a binding. Target for reducing its emissions of carbon dioxide. So it seems to me that the key is. A process and the resulting agreement that's flexible enough to accommodate. As again I think John. Inferred I think when John if John Reilly -- said I'm sure there will be in this complex issue. That the that the agreement be let that there are other types of commitments that the country can -- And it's. Pretty clear that China over the last couple of years or perhaps even over the last year has become serious. About considering options for making some kind of commitments. For example. China could agree to. As it is. Said it would try to do domestically in its currents. Planning document to reduce the energy intensity of its economy the amount of energy use for dollars or her. Her immunity of Gian. Gross domestic product. Or. There might the other approaches that China could take. The question is in my mind is the UN FC CC process flexible enough. To a comedy. Varying kinds of commitments it's going to take a lot of creativity. Two. Compare different kinds of commitments. In fact one of the discussion papers that our project is has published by many. Distinguished authors that have published papers attempts to develop. Approaches to comparing such varying types of commitments. Did its work a lot our taxes so. If another approach that China might take is to property tax on carbon which is different from Cap and Trade System but then hollow. Might this be linked to cap and trade systems and other. Countries it it's not essential to link them within the context. Of an international agreement but it would be helpful."

" So flexibility is key. The other thing that. Many are considering and including President Bush. An approach he took which was actually not all that. Was to somehow get informal agreement among smaller group of country is that together represent. Very large percentage of the emissions. And then to carry forward principles that might be read -- and such context. Forward into the broader -- and FCC's he negotiations. This happens in almost every negotiation. You have a core group usually. That that talks and then. After coming to some kind of agreement on the set broad principles. The discussions -- out. Now. There're several forums where this house and make continued to record. There is the G-8 plus five there's G twenty although everyone imposed on that we spoke with said. -- when he wasn't good place to do this because they'll be so focused on financial. The financial crisis. Or the major economies process that President Bush started although. We probably should we name it and disassociated with the current administration. To get people really excited about it. It's hard to imagine -- ultimately it if it will work. Unless you carry it out into the human absentees the to bring in larger group."

" Finally. I want to mention as an example of the type flexibility -- talking about. In in in a policy architecture. Four reducing the emissions."

" One of the papers that was written for a project was by Jeff -- who's a professor at the Kennedy school. Who proposed. A series of in architecture in which countries take on binding commitments but that these commitments. May vary according to their economic situation. Their economic situation now there economic situation in the future. And in fact there. Obligations and given year or in some other period of time within the overall. Period of time covered by the agreement is determined by a set of formulas. Which take into cut distribution will considerations. The economic cycle of recession ends. And and growth and so. Now he's not the only one to have considered such an approach and I'm not an economist so I shouldn't go into it into much more detail on this panel. But this is one example of a flexible but another example of another aspect is approaches that developing countries don't have to do anything for what a long time. After the agreement is signed. Which might potentially appealed China and other large and hitters in the developing world."

" I think that's all I have to say for now I'm sure that other points will come out in the context questions but -- would be passed on."

" Great thank you thank you Travis. That lead off so I'm a domestic policy economists. Primarily. So let me start with a focus there and then brought out a little bit. So we're looking at. As rob said it is the two big players in the room the need to get engaged to the US and China. And as is -- is roughly speaking. And that's certainly true and so. If we are to get China and other major developing countries on board it's clear that the United States needs to do something. It's a necessary condition the United States do something. Active first and then and then -- weakened hopefully bring other countries along. And so Leo the incoming Obama administration. Has been talking about an 80% cut cut and reduction in emissions by 2050. Just to give a sense. What that means. -- analysis that that we did to a program last year. That would require cap and trade with a Cap and Trade System initial prices on the order fifty dollars -- time. Carbon dioxide -- going up. Overtime. Increasing. 4% rate real. So that's a pretty significant price and certainly higher price and then. Stand the kind of numbers that that many people Washington talking about. And who knows with the economic situation may be being what it is perhaps these numbers change. But but. It it's it's an aggressive policy it's being discussed. And and it is it is the kind of policy -- which would certainly provide the kind of a credible commitment that that. Gives this. Greater strength in negotiating with -- with -- the country's. To bring them on board. It's also useful to it to recognize that might be other policies that we should be considering in addition to carbon pricing weathered through a Cap and Trade System. -- to a carbon tax. If we are -- takes seriously the commitment to increase the use of renewable electricity in the United States -- we certainly have to look carefully at the at the transmission and distribution grid. In in the country. We we essentially have a nineteenth century grid they're trying to plug 20% for power and to. I just finished. Or a report looking at at the tax treatment energy. Capital and we find. Pretty generous subsidies to it to the building. Wind power. Biomass. New advanced. Nuclear power. But thinking about intermittent intermittent. Power sources like wind and solar. We have got rid. Investments in the grid system are actually tax the very heart rate among the highest rates. Tax that all. That all energy capital investment are subject to. So this is one area that that we that it's probably worth taking a look at is the tax treatment of capital investment. Another area is. If we have multiple problems multiple market failures that we need multiple instruments. One market failure. Is. Call the principal agent problem when the people making decisions about investments are not people who. Who are and then ultimately paying the bills so we think about a rental housing for example you have developers rental property. Who are making decisions about the degree. Conservation investment. To make -- properties the tenants may end up are paying are paying the bills don't have really good information about the to really assess the degree of conservation investments in the there roles then four for both information. Regulatory approaches perhaps tax policy to try to improve. Improve. The energy efficiency of our -- buildings stock. Certainly information is important one one of the advantages when the benefits of moving to smart bridge technology and smartly -- things is to provide information to. To consumers about their energy use and and perhaps giving them greater. With more information a greater flexibility to reduce use and also it could be it he can be used to provide peak shaving. So there are lots of the lots of a potential benefits that come from. Both sort of basic information like energy labeling. 22 more sophisticated information is smart very. -- finally it there are other kinds of other issues that we care about with -- energy cynicism is slight tangent from this topic but we do -- Will. Consumption in this country for energy security reasons. And so on with a colleague hit at at Brookings. -- We've we've written."

" He's talking about a variable oil tax that would put it fairly substantial tax on oil consumption in the United States when oil prices are low. But then as well prices go up. The in the tax bases doubts that the ideas tried to keep. Ought to try to provide. Sort of based on the price of oil. By taxing him when prices are low but not letting them not keeping the tax in place when prices really high. It's ironic that were that we're putting considerable pressure on Detroit to turn to green automobiles. I -- we have a policy of having having you know less than two dollar per gallon gasoline it's a disconnect. That's going to make it very difficult two. To move to. Green transportation. So now moving out tort immunity two to the international arena. I think guys rob. Suggested there are multiplicity of policy options we have -- Europeans are doing there's potential for carbon taxes. And one of the concerns. That certainly. US policy makers worried about is the is the issue carbon leakage which is the idea that if we put. Prices on our carbon emissions then all that does is is incurred or apartment had to manufacturing to move to China or any other country that doesn't have apartment. Price in place and so we lose jobs. Through this -- kind of policy. And so. What I think we should be. What can help us minimize the probable leakage is is not that we all have to do the same thing but that we have to somehow I get a rough harmonization of the prices. So that if we have a Cap and Trade System in the US and the Europeans have a cap entry system roughly comparable prices in China were to do carbon tax they had roughly the same actually is the prices. That we can that we can mitigate much of the leakage. But in developing countries I think one of the first things we need to be looking at it is and being energy subsidies subsidies energy consumption we saw some of this happening last year. I think this is an area where the IMF has been pushing. Developing countries look very much closer more closely at their at their energy subsidies. As as a first step -- we think about things like carte pricing. That that's quite work. And this just suggests that there are -- that the notion of sort of Austin hard targets like we had with Kyoto. We can be more more flexible in general but think about the kinds of policy instruments to get to our goal reducing world carbon emissions."

" Thank you very much and I -- thank you Travis for giving -- the introduction. International process. You're going. I guess. I thought I would. The tell America that kind of the proposed topic for this session was what. And host an international process means for US. Policy and I guess I would. Say that probably. We want it the causality is wrong. What is really critical is probably what will be what the US might decide to do. And then that will be a driver for possibly what other countries might do because I think you've heard of benefits from. Some autonomy and give as well is that and if the US does not supposed to do anything. Then the rest of the world is -- hesitated to move forward so I think that in fact. No not. I'm not not simple sort of person interest numbers and fundamentally not much happened Posner. People agreed to agreed to negotiate. But they didn't actually specified anything particular. Not to so what are some of the topics at. -- man well. One is read the reduction in emissions from deforestation forest degradation Owens talked about that yet but one of the key topics is that we reduce. Land use change and the emissions wrote that that's a big debate and discussion. Opposite involves countries like Brazil and Indonesia was about deforestation going. Another thing developing countries are interested in is. Aid from the developed countries to. Avoid. -- kind of deal with cope with climate change -- damages that are -- come -- climate change. So that's another critical issue. -- and other critical issue is that and this is really sticking point. I have my colleagues and others -- also was in the audience to the paper for the Harvard project looking -- specific issue of developing countries. Only barely we're willing to discuss. Moving forward with an agreement."

" And I mean so it was very hard to get this agreement to agree to negotiate we're developing countries might talk about what. Conditions they would tape that one of the themes it's been through out all the about that particular protocol program is -- differentiated responsibilities we kind of unfortunate. Grouping of countries and annex one annex to the richer presumably richer and the poor countries. And so the way these devotion to -- to -- food is that all of those. Poor countries have said we will not do anything. -- We get positive economic incentives you must develop countries. Compensate us for so one of the kind of real -- point it is. What for how what developed countries pay for what would it cost. And so one of the UK and into one of -- he might have heard that that she. Any proposed a 50% reduction in world emissions by 2050 for 2% mostly clear but let's say it's below 2000. You know so we get a paper estimate what was that cost well it might only cost a couple of percent for the US to meet such a target. In the US. Like fifty. But then it in fact the US developed countries have to compensate. For all the reductions in developing countries that cost 10% of the US economy. Kind of well -- movement that -- So what you end up and there is you know likely to money. Several hundred billion dollars a year from developed from the US point countries and by 2052. Trillion dollars flowed from developed. So this is one of the real sticking points is that we have been pronouncement about what what what people would like to accomplish. But when that when these two groups get -- to go into into the negotiations. I don't think the developed countries really would. I can't see ever committing to something that would transfer. Hundreds of billions or trillions of dollars every year. To pay for production development countries and developing countries about naval unwilling to move the last. -- there's significant financial contributions. To them for the reduction so that's really huge sticking point in the in the discussion. It's I think one of the things. The particular scenario we look at was. If you if you team if you tried to go after the 180%. Below. 20/20. Two -- late fifties that was described in more Lieberman yes. And then what with the developing countries have to do in order to meet this overall 50% well they would be 30% -- 2000. And so then if we really we're gonna compensate. Developing countries were trading mechanism we would have to accept negative reductions and we have to allot. Allocate negative allowances states and and buy back from -- countries so this but the reality of what the goals are. What it would cost and then this compensation thing. Is the majors a major issue and stumbling block until people confront really what's at stake there and say well we're not going to do that what are we going to do. -- troubled him moving moving moving the whole process forward. But I think in the mean time. So so. Whether those goals are realistic and the US stepping forward and and and and doing something and presumably. Serious cap and trade program I think is -- first necessary step. To even move the international process. Process forward so I think we don't begin doing that. Then that I think won't you won't get very much. This next degree in Copenhagen. And Copenhagen agreement is is -- and that. The Kyoto protocol is set a target for them to two twelve in the Kyoto protocol it called by 2009. That what the caps would be in the next compute because it. So -- so that so the Copenhagen meeting is really critical one in the thing and without the US doing something. That in the Kyoto parties. You know are hesitant to kind of make deep commitment and yet you want to expand this agreement some way to -- other countries so. It it's it's that it's a difficult process. And I think we'll see. I mean I think to think too much about international process and that success. Is depressing. Because we won't achieve anywhere near what people. Say they want to achieve. But I think we need to make steps toward states and that the positive first."

" Thank you ever -- I think that. A lot of lot of ground Cyanamid opener looked for questions appease get them ready. But. And think about all of the different issues that were raised we had. The importance of bringing China and -- the table the next round negotiations we had discussions of technical technological issues in the grid we discussions over what's Obama going to do in domestic initiatives. On and then John Brown at Kansas -- back up with some of the conference of the national areas. And -- and lots of policy alternatives in envision futures how. The US and international community can move forward either in parallel and hand or. Or at civilians and table and being under an international agreement so. I would like tip -- for the panel may be just a brief. Opportunity to comment on if there's anyone who wants to comment on anything else let's -- you're making notes on McCain's comments treatment audience. I think is. Okay so it came as -- questions yes. What -- this season --"

" Concretely. Very short table there -- Oh yeah. Yeah he's. Cool. It's hard for."

" Who hasn't developed countries continue to come in with this concept which is completely befuddled me. In that they what technology transfer. Now. -- an economist it's very hard we understand what exactly that means. Anyone wants to buy AG nuclear power plant can go to achieve it time and and -- And so it's not like here's. You know magic technology that we have that can't be purchased. So. The issue is usually that somehow they don't want to pay for the technology and so. It's a very confusing. Discussion. If somehow there's this. If this way to do it that exists in developed countries and if only we would tell them what it is or let them have it it would be. It would somehow magically happen. But you know in -- market system -- you know we can't know what. It has happened in aids drugs for example we've gone through drug companies and said you know your opponent you gonna kind of get that right. It you're not going to get and rents. And let's get drugs away for free -- cheaper last month caught development I don't see that happening in energy technology itself. -- sense of the other issues that. Some of the things that. Economics in developed countries -- economic because. The relative prices so you energy subsidies. Then the more efficient coal power plant is not going to be economic so. So I think this idea of developing countries keep wanting this technology transfer. What exactly that leave. Is unclear and then I mean there -- also what mechanisms to kind of financial mechanisms until the other element is just you don't like. You know of -- and look at the aid program. And they are one of the -- that they're always very worried that if the developed countries come up with some billions of dollars they say they're going to commit to. Reduce carbon emissions that that's that that's going to reduce the rest of the gate ready get -- life kind of tricky balance. Wanted to make sure that some additional about it. And then once you say we don't know what future rate will be Fitzpatrick tricky thing. Is that additional what might have been enough so those are some of --"

" Yet these payments for the book."

" So blinded me to pitch for people to read the report that the joint program wrote the bill for for for the harbor project presenting it to it's really -- report. And so the 10% welfare does is kind of a question and comment on framing. Framing the analysis that. That that 10% welfare lawsuit if the developed countries were to. Pick up the tab for the entire world is it is a compelling figure and it and it really makes it stopped working well this is going to be. Really really heart to do. But then if you if you look at carefully deport you realize that. If you if if the developed countries if I understand this correctly cracked me wrong John but if the developed countries were to pick up the tab. Then. Between now and 2050. Welfare for the developed countries a per capita. Essentially doubles instead of going up by. You know two point. By a factor two point four. So. If you if you look at it that way it looks like listen really not that expensive. And it -- so there's a real framing issue which it."

" But it -- I mean that's burning issues listed. In critical one thing people talk and but that few percent. TP or two days a 10% of GDP growth. I guess. The -- the difficulty years that. You know if we allocated allowances -- we did this sort of thing so it wouldn't compensate developing country. Then."

" The issue get into kind of essentially the mark for bounces movement like the oil market. In oil. Fluke of nature has given all ultimately. This would be negotiated agreement we give all along with the help developing countries that we purchased them map. And the you know and think how many times we've looked at our oil bills and if and said why are we paying all this money to these to these countries. If we could just eliminate it on paper and not pay it. How many times -- we not done that the all well it's a little bit more expensive to not make the payment we've. Do we go we go invade the country if a bit but that's really costly the trouble with the allowance processes all you have to do it kind of back on the deal. Renege on out of there and all of a sudden. You don't have to make those payments anymore. So that's kind of I think -- you know it's it's it's -- market. We do go to big trade we do that -- flows of money for markets we have to actually buy something we don't like. And so here we have to actually. Regulate ourselves people along the way and then we isn't -- that's the trip this was. One of the sticking points in the Kyoto protocol -- that we gave. A whole bunch of allowances. To Russia. And then when people do the calculations they realize we realized that was eight to ten billion dollars a year to Russia. The US be paying to get those allowances back to reduce our costs and -- and when we thought about that and you thought about. What. You know where that money might go in Russia surrogate also Russian expert at -- and you know so that that we fear that they think you're helping -- Is that you know that may well be allowances sold by death threats who it. Take the money and put it -- personal back account and then after that a few years later when they. Country. The country would -- And that -- and they have to have a missions they couldn't buy them that. So the whole idea. Legal framework that would have to exist in the individual countries to make this work. And the international framework -- a lot of tough question."

" There in red please."

" Leave. We usually. Chris be -- for right now. The age or older car and."

" Until my sense is that. This. This. Massive trading system which is. You know would dream of economists. Isn't very realistic and to leave yet you know really mature regulatory structures. In the various countries which it apart. So I've been more of kind of if and if China. Like Fiat says we're not going to build anymore coal plants if that's the sort of thing policy they want to bring into the system. You know fly an outline what some Cap and Trade System and the question is then. I mean the real question is there are many ways we could think of compensating them. The question is. How much money do we really prepared -- I mean it's not so much that case mechanism. It are only a China. Ten billion dollars a year or not in -- and so that really use. You know if we want to ship them. Free nuclear power plants we -- we -- page you do you'll import them if we had two give them -- in my that we can do that so those mechanisms. That difficulty just. Really willing to come up those dollars and -- would attack workers. I'll turn it Melamine China might -- carbon tax -- But if they want to be compensated them all for the call we get sent them a check of some sort that somehow was estimated to. Make up for some of that cost war. You know three technology. However that."

" That began coming back coming to a different case I suppose. Bringing China. Yeah I think I mean so I think. Given that -- decade Cap and Trade System the uniform Cap and Trade System. Could be so easily abused. Where there's not -- Regulatory structure and the ability of countries to death. -- if they weren't happy with I think other measures may be less subject to that -- that differentiated policies. The question is probably differentiated responsibilities well I mean one of the issues is you know not. What tricky things is developing countries were unwilling to even discuss the hell out. Where they thought there'd be compensated. Because they don't they feel that even accepting that cap is going to limit their growth and they really don't look at the compensation. As making up that. So are we -- conference -- think well if it's fully competent doctor and an effective growth but they were unwilling to even. Discuss that because -- partly because they probably suspect that that's happened with Kyoto. If they've -- the cap Lehman and again it depends so that two."

" Just want to quickly make explicit assumption we don't care. Or a point of fact I should say that the Kyoto protocol. Doesn't specify how. Annex one countries that have caps meet those counts. Leaves it totally up to although there are provisions that -- call for net trading system that system is not required. And so each country. That hasn't a commitment is not allowed to meet that commitment however they wish."

" Yes."

" Okay so I. We. Yeah. -- I. The greater -- mean."

" Well."

" Mean there's real costly born here. So it's very hard to find ways that somehow both parties can benefit actually be. More often I guess. One of the current problems between the US and China is that China doesn't really respect intellectual property rights that's one of the problems preventing. Trade him. Some of these. New technology. Companies are loath to build a plant in China if China for engineers it. And then. Essentially takes technology. So that the big problem with some agreement could be reached there is another question. China has big air pollution problems and one of the questions we kind of baskets. Well they -- what this all their air pollution problems and we could somehow help themselves and pollution problems might that also reduce. Congress some degree so you can look for some of those two things. You know. Those are always hard line."

" Yes. Don't."

" Yeah there's there's one area in which there's an obvious area where there can be cooperation. Even if we didn't cooperate. The government has a role in helping to figure out how we're going to do for example carbon capture and sequestration. To be some sort of bridging technology while we still up fossil fuel plants I'm not ready the moment talking about subsidizing and I'm just talking about. Doing the experiments that we need on large scale to actually understand that technology those are experiments that need to be done in some sense globally. Could be done cooperatively with China. And they have to be done at a level of science that is broader than the kinds of technologies that -- appropriate. There are also technology elements of that they can be appropriated by companies so. There are ways to engage like that one which would sort of yet the country's. Working together. On one field of cooperation. That is. You know supportive. Of what else might be done -- cap and trade or other kinds of measures reducing energy subsidies. And so long. But that so that's an example where you would be with. Other countries the reforestation. And problems are another example where there might be ways to cooperate. Which laid groundwork. For future. Set of measures that would somehow cap or price. Or give the right economic incentives."

" Yeah. That it's clearly important to get US and China on board. I think a lot a lot of people are announcing hold it all we have to do is get China and the US do something -- never find. Well we don't get Indonesia and Brazil and Russia. On -- also significant ways that we have real problems with the with with the forestry and land use."

" You didn't follow. News about site G-8 plus five -- that -- that people can. Bring that -- get the leaders have been major manners there well has already been then you. -- QBs perhaps. These -- meetings there it separate. Meetings of the environment ministers Pryor's. -- Answer -- and last year me votes split. My he's. This year's. You know. Peace and see -- you know him or. Suggest. Smaller groups. Eight so there it and it will. I think it hands. Officer Stan. It -- work force there. I think -- right. You know. -- China. Eight something happen. You first. Sort. One thing. He. It's. Except that there's. It. That statement. That. These my experience that these passes this -- You know. -- hope all of you. Stories built in the way you that. There are you would. Period start now what you got. Program. In the most fun things."

" You know. Twelve ten that meetings -- That process of bringing some of the key developing countries into running the world power sharing and running it. Could have up you know gives them more sense. Being in control not being told what to do and that could. Help. With them and saying yes we are controlling the world and we agreed to do it rather than being kind of preach to put things I think that development in international. Economic discussions could. Should be should be pushed forward because the because it might have that psychological effect on. Develop you know people like China and India and Brazil and South Africa. That participated."

" But we don't know what files are here. Or not. 88. Or. I hate it every parent all. It earlier IRA which is Brazil Russia India and China yet so G-8 ready 888 industrialized countries that start off this. My and and I yeah sure did yeah -- We've got me -- you will answer. Brazil. Brazil Russia China that the."

" Exit polls so. -- So it's. No different parts of the world and I think it actually and that and that could -- leaders from those countries network with. Other countries in the region."

" Absolutely and I heard was not that Tom a lot of these Ngo leaders. I was talking -- we're actually looking forward toward the July GA meaning. -- as the next major milestone not necessarily company -- insiders. Getting the world leaders not just that ministers. Of environment to ministers -- to talk. If -- serious that is next really big house. We have one here one there and then back."

" Well it's not difficult to move forward at the federal level in I mean except that we chose not. But we can choose. And the actions for example in California is a little bit different but in New England. Most of in the people who negotiated the Reggie system which limits carbon from the electricity sector only in new England and middle Atlantic states. Design that primarily as a spur. To get the federal government to act not really as a substitute. And they'd be very happy to have it sort of disappear. Given a federal system overlaid on top so you can certainly you move on the state level but in the end it's kind of harder. On at state level for problem like this you want. To encompass more and it's not that -- to question political will. Is that the mechanics and there is a lot of mechanics and will employ a lot of people it. Thank goodness for us for that but. In the end it really is not that we know how to do these things and it's been functioning perfectly well in Europe for four years. So. So that the question is only one who."

" What is the functioning quite well it sulfur dioxide. For longer that --"

" I guess I would I mean. Again I think most of the State's work work to Florida. Hoping. Well come along make an -- The other aspect of what state that. Mean the technical."

" For most days. Compact the kind of the level of technical expertise. In the states to deal with this was really really very limited you know California. A lot of technical expertise but. Moved many states that others wondered if people have some bad idea that they do. When they're not doing their full time so it it it it it it really would be. It is better. That you could economize. That why do you want to."

" And I think that's and most states there's a lack extricate one interest things I saw imposed on also is. I'm bill and I -- in California and even Massachusetts New England the reds system were well represented -- representatives. I'm not during the negotiations for the US there. To learn from others and talk about experience and and it trades and I saw several presentations from yes domestic."

" States there at the very good side. These presentation that. And we don't need it."

" Others but any case he is OK. So. So -- corporations. System. It is very best handle on. Federal versus state these. -- Western states. -- Or -- California most definitely. If did you -- system we usually. -- When you mention in the northeast. You -- It needed problem Internet. And he bigger. Morally. What state is or is it much easier or. So the media company's first move. Prostate. Works."

" And to typical. I can't amendments could."

" Yeah. It's."

" I mean. Yeah. And and it. -- And nobody won here two. Ambulance when he US and in addition -- that. That. You let me you know how can you back to work. You know. In the eighties -- gains in the you beat -- Very lucky. And -- off that you didn't let. My -- the moment part of the ready yeah you can't. Oh yeah. And it. More about it. The relationship between our excellent. This -- an -- You know trust me. She -- not that he. Yeah. And you know I'll ask. One in the kingdom -- that. She then it's. Okay that. To get an attack in would you -- Yeah commitment from the that it changes in. Thank. John. What you leave it there is. Continues to be and that we have. And that's -- occasion to. Oh and not related to. Do you -- about. Okay you know it it's okay this stuff is huge in the back room. They. Maybe it's --"

" Maybe nervous."

" Act which is not known -- it yet that it would get a new. How bad movies what you think about -- and actions. Because -- kept. An off -- Johnson. -- patient. Actually -- and so one thing where you use. And sanctions."

" And I'd like to make two points in relation to your first couple points. One is I believe very strongly that as I said that the opening that the US needs to take unilateral action. And we have to find some of these other ways to engage as I've been discussed by a number. But I think that's all part of feeding back in to the UN framework. I don't see it as stepping out. -- he was a big problem the way bush advanced things like the major bidders conference was clearly as a competitor. To the UN process as opposed to something that feeds into it. So the idea the United States taking unilateral action is not say we don't need a framework convention but who's to say we need this as a step. To help move forward the framework convention and then there are many ways of engaging. We in the constellation of activities that the framework convention is involved -- To pull people it so that's one thing the second thing is I just think this whole conversation is going to change tomorrow. That. Not tomorrow exactly but. These what's gone on for the last eight years in the United States just refusing to do anything. Has poisoned a lot of welts and but he can also be changed quickly and I think it's in the interest of both sides to that happen. For the you know people talk about its climate change can be one of our priorities for the administration. I don't know what -- clearly the economic mess is a big deal. But for the United States for its own national security and diplomatic objectives in the world. Our refusal to deal with climate change has put us way at the bottom of having any influence and a number of things. So one of the easiest steps a president can take for the purpose of advancing our foreign policy. Whether it has to do with trade treaties or national security issues and so on would be to take an affirmative action. On climate change would. Turned things around to the advantage of United States national interest. And similarly we could then engage positively. With the countries which you're describing who don't have trust. So I I think it it. And it is certain that there are."

" Crustacean which becomes still very quickly girls -- we -- having that. And I -- some of that has this one because. The -- you there are issues that we are in which people have you know we don't all agree we have different. We we wouldn't make different choices on guidance or support and sure on climate change their can be. Aspects of which we don't agree -- but the idea that it's not a problem in front of us that we ought to. Get behind it and be able to deal -- Then we can start having real debate about what the level of action is that we really want to that's when we'll really can have an argument but. The past argument is an irrelevant one. And the whole conversation will be different in the next four years."

" you want to comment on sanctions and anyway. Implement --"

" And saying it's a very important question and it's a very difficult. -- and this is something not need to climate change but this is true. With regard to. International agreements generally. As we know -- was still made up sovereign nation states although. -- And when you. -- of sovereign -- days there's. No. There's no end you debt and really enforce any old. Have you all -- system now that that's a very. But also. Description of the situation but just say it's not meet climate change."

" But there is that there are -- potentially. -- tactics systems. I think it's useful to keep in mind that -- country decide to go to tax route."

" It's to their advantage to force it to collect revenue. And as opposed to creating very valuable assets that we're giving away too potentially corrupt -- this is this is huge problem. They're all kinds of problems -- taxes to be sure but I think there you you do have one advantage in the sanctions. Important question over here and -- kind of work program so there."

" It's."

" He managed. Won't oh in negotiation. It's too easy. He won't do that yeah. Often mentioned that thought -- It's an issue. -- these. You can this is just because. And he's blown it up. I -- you -- you. That people. That you can view mine. You know. Thank you sound quote. So it anybody we view it. You need. --"

" These."

" Death yeah. So we'll it's who. Maintenance. First. Needs. Days but I can mean. A group countries. Are -- six minutes accurate from countries it is in others and we're going announcer technology standards which call me. -- And -- honest men and now it's meant industry is trying to do this or these I think he's. The world council. Stick -- is not what -- don't. Witches. Eight. Working. In the process. There are also. Central front we -- countries that your greatest -- and end and also now we're so China. Which involved. Standards. For answers --"

" If you. -- Just -- if you want. There's. You know. Yeah. Oh. Yeah. As the that's -- Ainsley Hayes. News."

" You know I think it I think one of the issues is that you know the timeframe. Carbon reductions and the timeframe with economic crisis two they're two different time for it if the glass. Unless it's really bad economic crisis will play itself out the next couple of years. What what we're talking about with the US legislation program is some sort of caps coming -- place in 32. So by that time. We hope the economic crisis we over. It's very hard I mean there was some discussion about well might well. You know import them as public works things built -- bicycle trails or something so I mean maybe there's some things with. Infrastructure wise. Lead us toward something that would be helpful but I think those are relatively. -- And you know and so the main issue like economic crisis that is costing us thinking we can't do anything about climate change. It is if people think about it intelligently it's not because there's an economic crisis because we're talking about doing is committed something we have to. It is over it's just that you know. Government officials could only think about so many things at a time and they get their list of priority things. And those are the five things they go after. And people all that list that you're kind of in the back -- and that's I think the question of whether you know health care. The client and they and they financial crisis. XY and -- will be. Pick up everyone's you know that kind of presidents and the people around his attention and they're just won't be room -- that agenda for planets and."

" Although it somewhat harder to do something -- his right. -- The constituencies. Representatives senators real. -- So are outbound directed the last ten minutes of scheduled times so we have these three are former questions are going to try to keep them. This question and answers to think."

" Yeah. News. Yeah."

" The climate issue. Because it affects stock problem. What we do next five years doesn't matter. Essentially it's kind of setting in place that something that would regulate carbon emissions over the next hundred years so if we. Lose a couple of years over Copenhagen. In reality it doesn't make them faster but he'd lose we kept losing. A couple of years a couple of years if we don't do something at some point them. You know. -- then it gets tougher but. You know I don't know what. Failure Copenhagen means I don't think it will happen because. Other than to the extent it always happens an agreement we signed it won't mean much but negotiators like to declare success at the end of it. They've that the -- dramatic goes to the eleventh hour people stay up all night. And then they agree on some reviews -- you read it carefully. Doesn't mean -- We're likely but."

" It is -- Yeah."

" But her eight siblings plants but. But it perverse way the recession has bought time it is emissions are going to without. The next couple years significant -- it and we how little wiggle room right now. Which is it's unfortunate it happened this way but it did happen."

" I think."

" Where he."

" Unless you --"

" So --"

" it's that you will move over first. -- I'm here yeah. We'll call -- people who -- We view this."

" And how old."

" Oh yeah. Long few. It's okay we'll."

" vote. Can be easily misinterpret it meant something really quite different than what that. The Clinton administration. Led by Al Gore small group people. Went to I guess. Geneva. And now binding commitments and told no one else in the executive branch and no one in the that. In the summer reading -- So. United States senate. Can be consulted on treaties. And they felt this was. Tying the hands of the US without consulting the Senate so most of that -- lies about senators thing. We're going to slap this completely down. Because you didn't talk to us about it. And so largely that we thought about that so I've talked people in congress that they will. Confirm that sort of view so. That in addition things have changed a bit since since I don't. I think there's still that sentiment obviously there's still competitive issue I don't think it's really strong that vote indicated."

" We're not -- to choose to do something unilaterally. In the same spirit. That when Kyoto was negotiated you've got this annex one set -- to set. Any notion that the world is divided up between those we're gonna pay for the problem and those who are not just crazy. And the world has passed that -- China is in a totally different position now than it was in when Kyoto was negotiated. And not just isn't in a different position the whole world thinks of it in a different position and China thinks of itself. In a different position. So if the United States takes a unilateral action. It will not be under. General feeling that oh and that's the end of it. It will be in -- context. -- going to take a step forward in a global negotiations. We will and and there will be some sort of language. Maybe we'll have binding caps or five years ten years or something. But they will be reviewed. In light of actions by other countries. And there will be a whole discussion that this is -- part of a global negotiation. We're all countries have to take part. You know business I think in light of my earlier comments that the whole conversation is going to change. China has been able to hide behind fact that the United States refuse to do something. They could talk about the fact that you and then you this business about them being a developing country if the United States did not exist if it just went well. And disappeared from the planet. China would have -- carbon problem. The amount of emissions they're putting out would be warming bear hello. Without us being there. So wait yeah that's just it's just nonsense so. I think we take this step because. We are rich nation we happened shouldn't have a problem and we want to provide leadership. And it will he said it that way. It will be assumed that there will be your requirement that other countries take it as well we will not -- anybody off."

" But if I had just real quickly there."

" Or. For an -- so yours mine. Important. Aren't we -- CE."

" On the I loved it and where."

" New ideas. This is."

" There is wrong. Especially."

" there it is here is a lot of perhaps most beautiful. -- I've been telling. Usually what if there is that here."

" I think his -- as India and diplomatic tool that dynamic process. It was a way for one set of countries to pull other countries in. To get apparatus is set up in those countries to be dealing with the carbon problem. To start pulling him into this larger framework. The Europeans have a strategy. What they call graduation. So the new CD. Would be yes you can keep getting project credits but in order to get them. You know have to move to a higher level of commitment. For some sort of a cap and that's what I mean you want to think of it and it dynamic framework it's one of these attendant mechanisms. That helps to move you forward in the direction of a --"

" And I just following up on that one of having seen him has pushed for and as far as overall. Kramer convention is this national mean Torre so. And about national inventories which is how much greenhouse gases in it to -- nations doing. These you can't put spins again. So brings the developing countries to take things take time not just that developed countries that game brings the whole world to start thinking about greenhouse gases. So we're closing up I think there will -- take it. Yes."

" I see. And -- says. And and I see. --"

" Certain message of hope. I'm I'll get one last. Actual asked the panel one last question and just so -- give you a warning it'll be. What is -- to sentence meaning of hope so I think all of us talk about dying. In an investigation stalling and what time to actually windows. It's always nice -- and I'm not where we go from here what's the next step. Com but I would like to follow with. One of that interest in things from outpost not coming back to that I'm that I -- hope which was Al Gore's speech he gave a speech on towards the end of the conference. And did it righted things calling out particular countries and given him credit where credit is due in and I am blessed in you are falling back on its commitments. Arm and then really talked about a switch on Parsons is mentioning which is. The dynamics of the US are going to change and he mentioned Elvis in front of the entire delegations there and it was a very lower sixties. Those that attended and and I think it it is one of the higher points I think that the post speech that towards so. If you have 81 or two sentence. You can be hopeful that something's going to happen."

" I have a leave can. I suppose that we don't eat them up. That and that he addressed. Of all everyone Rome news well you and you --"

" Last -- administration. Thought it brought people would prefer."

" certainly it."

" I think that the changes."

" The movie where countries like China and India Brazil. And others may take a stronger role and -- consultants from the economic crisis and other things may break down on me. Barriers between north south and actually that lead to progress on many issues equipped. Climate change is one of them I think the financial crisis realized we need time to. At some stimulus package all the active reserves thing that up until we really need them more than we have in the aftermath. Q and a creating more transfer agreement."

" The -- I'd like to you to join me taking a panel."