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-- is to focus attention on the top issues that the next President should address. The project features over two dozen essays by Brookings scholars and our extended family of writers on the major public policy issues that will shape our prosperity, our society and our world. Today, we're going to focus on an issue that stretches across all three of those domains of public policy, climate change. I'm told that Lyndon Johnson once said if they're going to blame you when it's raining, then I sure want to take credit when the sun is shining. Evidently, he said this about the economy and not the weather itself, but times may be changing. Presidential candidates now may try to take credit for actually doing something about the weather. A whole crop is now stepping up to the plate to try to get credit for affecting climate and stopping climate change. Today, we'll have two panels that will try to get a better handle on what are the main climate change issues that the candidates should be grappling with and some of the specific proposals that the candidates are putting forward. The first panel will be a Brookings panel that will address the new dramatic attention to climate change and lay out some of the issues that the candidates and their surrogates in the next panel will be facing. The second panel will feature representatives from the McCain, Clinton, Edwards and Obama campaigns and will be moderated by ABC News Political Director Rick Klein, Editor of "The Note." Today, I'm joined by two of the country's leading thinkers and writers on climate change. David Sandalow, immediately to my right is the Energy and Environment Scholar in Foreign Policy Studies here at Brookings. David served as Assistant Secretary of State for Oceans, Environment and Science at the State Department and was jointly Senior Director for Environmental Affairs on the National Security Council and the Associate Director for Global Environment on the White House Council of Environmental Quality. David is one of the most fair-minded public servants that I've known, working on this issue. He has major fans in a wide range of political leaders including Al Gore, Richard Lugar and Chuck Hagel, the famous author of the Byrd-Hagel Resolution which was a major obstacle during the Kyoto negotiations. David is the author of a forthcoming book on ending America's oil dependence as well as an Opportunity 08 paper on the topic which is available at the back of the room. Gregg Easterbrook is a visiting fellow here as well as a contributing editor at The Atlantic Monthly, The New Republic and The Washington Monthly. Among the vast range of topics Gregg has written on, including professional football, he has been a careful student of the science of global warming. Having studied debates about what we know and don't know about the climate for over a decade, often to the frustration of environmentalists, the title of his June 2006 policy brief in Governance Studies says quite a lot, "Case Closed: The Debate About Global Warming Is Over." He has also written the provocative cover story of a recent Atlantic Monthly, "Global Warming: Who Loses and Who Wins." We'll have this discussion for about 45 minutes and have questions from the audience. I thought I'd start by focusing on the science as well as some of the other issues and just simply asking our colleagues here: What has driven the dramatic increase in attention? Why is climate change suddenly something that Presidents would want to take credit for addressing? Well, Bill, let me just start by answering this way and remember the date, September 28th, 2006, which I think is going to be remembered as a turning point in the global warming debate and why. On September 27th, 2006, Governor Schwarzenegger signed AB 32 which is cap and trade legislation for the State of California, by far the most aggressive and far reaching climate change legislation ever enacted in this country. I picked the next date as the pivotal date because on September 28th, 2006, the newspapers in California and around the country said that by signing that bill, Governor Schwarzenegger sealed the deal for his reelection. For those of us who have been working on global warming issues for 10 or 20 years the notion that signing a global warming bill could seal the deal for somebody's reelection in a major state, I think is quite revolutionary, and it reflects the underlying trends that Bill is pointing to. Since September 28th, 2006, we have seen a pretty astonishing report from the world scientists, the Intergovernmental Panel on Climate Change, which reviewed thousands and thousands of peer-reviewed pieces of literature and came up with the conclusion that evidence of warming is unequivocal, that it is highly likely, in excess of 90-degree certainty, that the warming that we have seen so far is caused by human beings and human activities and went on to detail a range of conclusions. They point out, for example, that the last time the temperature was as high as it is today for a sustained period, sea levels rose by about four to six meters as a result of glacial melting, and there's a long list of conclusions on the science. To take another minute, if I could, in terms of your broad question, Bill, about why this has received such broad impact, in addition to the science, I guess I would point to four quick additional factors. The first is the business community, and what we've seen from the business community over the course of the past year has been quite astounding. In addition to General Electric an Wal-Mart and other major companies such as that signing on to the notion of binding cap and trade legislation in January, we have just in the past month, General Motors signing on to that proposition. For those who have paid attention to this debate for a long time, the notion that GM would be signing on to the binding cap and trade legislation is pretty revolutionary. Obviously, the Democratic takeover of Congress has propelled this issue. There are now so many hearings up on the Hill, it's difficult to keep track of all of them on this topic. Speaker Pelosi has been quite forward leaning in terms of pushing this issue. But I guess I would point to a fourth factor which is Republican support on this issue. Just yesterday, we had two Republican governors on the pages of The Washington Post, declaring the Administration's conduct unconscionable, their word, on this issue. We have a huge number of Republicans including Senator Lugar and others who have really been pushing forward with aggressive policies. Finally, and then I'll give Gregg a chance to talk, I don't think you can point to the important factors driving this debate without prominently mentioning Al Gore and An Inconvenient Truth. This has all happened in the wake of An Inconvenient Truth. It's now the third highest grossing documentary of all time. I think it's done two things probably. It has educated a lot of people who knew nothing about the issue, and it has also raised the salience of those who were paying a little bit of attention. For those people for whom global warming was one of ten issues that they were mildly paying attention to, this movie has dramatically elevated it on the radar screen. Those are some quick factors, I think, driving the debate, Bill. Gregg, tell us a little bit about the truth, particularly in terms of where you think the science is on what we know and don't know about the impacts of climate change. Impacts, well, we don't know anything about the impacts. The science on the world getting warmer now is pretty solid. For me, 15 years ago, I was very skeptical and I didn't pull that skepticism out of the air. All the major science academies of the western world were very skeptical, 15 years ago, the National Academy of Sciences, the American Academy for the Advancement of Science and so on. Roughly five years ago, the science academies started to say it looks like global warming has been proven, and over the last two years, all of the major science academies of the western world have said it is their belief that human impact on climate is now proven. So, to me, it was perfectly reasonable to be skeptical once about the concept that there's a human effect on climate. You do also see it in the political system. I have several friends in the Bush White House. Five years ago when you tried to talk to them about this, they would all say: Oh, it's so uncertain. We need more science. As recently as a couple of years ago, they would say, did you see the Michael Crichton novel about global warming, at which point you would sort of put your head in your hands and say, it's a science fiction. Buffy the Vampire Slayer did a great episode on global warming too. I wonder if they saw that. But in the last year or so, people at the White House level have completely stopped saying this. They now say, yes, we're convinced it's really happening, but we don't want to have to deal with this, which is an understandable human emotion. Now, when you ask about what science can tell you about the impacts, my guess is that science cannot tell us anything at all about what the impacts of climate change will be. It's all speculative. We can't tell you what the weather is going to be next week. We certainly can't tell you what the climate is going to be in 50 years. There's a huge range of possibilities for climate change. I know it sounds like they're the same thing, but climate change is much more important than global warming as a threat. If we just knew that the world would get somewhat warmer but the climate wouldn't change, that's not so bad. The world got a degree warmer in the 20th Century, and that was probably good for us overall, but the climate is likely to change as well, and that could be dangerous to a lot of parts of the world. It's totally inconceivable to know what the effect will be. There will be some winners. Some societies or some places will be a lot better off in climate change. Some will be a lot worse off. The globe as a whole, it's hard to tell. My main line on this is we not only don't need to know what the impacts are going to be, but we really don't even need to think about this because it's so totally unknowable. All you need to know is what you can be sure of, and what you can be sure of is that there's now some human impact on the climate. It's likely to make us unhappy, and this justifies the first wave of greenhouse gas reforms. So you do the first wave of greenhouse gas reforms, and then 10 years later you reassess the situation. To give you one quick example, the Stern Report that the British Government did on climate change that came out last fall tried to project what the effect of climate change would be on the global domestic product in the 23rd Century. I mean what a total waste of time, a completely meaningless figure. If we can guess right about the next 10 years, that will be remarkable. Let me ask about that then a little bit and shift to the discussion about policy that in particular the surrogates for the candidates will be having. A lot of the discussion about policy in order to deal with climate in an economically effective way sets a target and timetable that extends 30 or 40 years from now, and it's a pretty dramatic one. Eighty percent below 1990 is going to be the standard issue from a lot of the campaigns that we'll hear from today. There are some that are even more dramatic than that. So if we're only acting in 10 year timeframes, how can we get out to that 30 or 40 year target? I think all those targets are completely meaningless except in the very limited extent that the debate over targets may inspire people to take political action. The targets themselves are meaningless. What you need to do is price greenhouse emissions so that there's an economic price attached to them that's enfolded into the cost of goods and services that people buy, so that you give inventors and entrepreneurs a financial incentive to defeat greenhouse gas emissions. Price the emissions. Let human ingenuity come into play and then 10 years from now, we can think about this again. Washington D.C. loves models and projections because we love to believe that we can predict the future. Our track record at predicting the future is awful. It's not even clear that we can influence the future. The last institution or organism in the world that you'd want to trust to predict your future is Washington, D.C. But it is fair to say that greenhouse gases are probably not to our benefit. Let's price them. See what the market comes up with. Then at some point in the future when the science is stronger, we can reassess. David? I agree with a lot of what Gregg is saying, and I would like to celebrate that fact. In particular, I'd like to celebrate our agreement on the basic proposition that the case is closed on the underlying science of global warming, which Gregg is emphasizing, and the point that you just made about the most important policy step being pricing carbon in some fashion and that, more than anything, is most important. I don't believe that you are correct, Gregg, though, in saying that the future impacts of the rise of heat-trapping gas in the atmosphere are unknowable, and I think that the IPCC's Working Group II report, for those who are into the subject matter, belies your claim. It's a fairly careful study of what's known, and it comes out with a broad range of conclusions about the type of impacts that are predictable and quite knowable. They include sea level rise. They include severe damage to unmanaged ecosystems. We can talk some about that. This notion that global warming can be good for you in parts, I mean it reminds me a bit of saying being a grossly obese couch potato reduces your risk of sports injuries. That is true as far as it goes, but that doesn't mean that it's a net positive. It also doesn't mean that saying that is particularly constructive in terms of getting somebody off the couch to actually improve their health overall. To go back to what I think is the most important point; we have a good body of science on the impacts of global warming. We have never seen greenhouse gas concentrations in this range in all of human history. They are accelerating at rates that are wildly unknown in human history, and the potential threats are very serious. In terms of making reductions, we've seen these targets and price signals that various politicians have put forward as recommendations. They seem to indicate that the United States would take a pretty big leap forward without the action on the part particularly of developing countries where emissions are growing pretty rapidly. The famous Byrd-Hagel Resolution, one of the key elements of it was looking for steps from developing countries. Give us some sense of how that has changed. Are American political leaders likely to move forward without action by developing countries? What is our fair share and what should their fair share be? That's a hard one. You can answer that. I'll do it first. To the question, will the United States likely lead without specific action from developing countries, my sense is that the political dynamic has changed a lot in 10 years on that and that the likely answer is yes. I would point to, for example, the bipartisan agreement of the National Commission on Energy Policy which came up with an approach which had broad agreement across the political spectrum that said the United States should lead and then we should do a review after five or so years and see how other countries are responding to our lead. My sense is that that has become the central tendency of the dialogue on Capitol Hill right now. Ed Markey had this great line about how you can't preach temperance from a bar stool. I think there's a sense, there's an understanding that for the United States to act, we should not insist upon simultaneous action by developing countries. At the same time, one other point on this, I think there is a big sense around the globe that the biggest barrier to global action on this issue is the failure of the United States to act. One way of saying that in another way is that if the United States acts, we will prompt a lot of additional action around the world, so there is a multiplier effect. Every ton that's reduced in the United States will prompt additional reductions around the world. Gregg, is that likely? Do you think China and India will just simply pay attention to what we do and follow our lead or will they just ignore it and continue to grow at their own pace? No. Actually, they already are. I agree with David that the United States should act on its own for domestic reasons regardless of what the rest of the world does. It's all but certain that Chinese greenhouse gas emissions are on track to swamp our emissions soon regardless of what we do, but that should not stop us from acting. It was just 10 years ago that people were predicting that China would swamp the United States sometime in the middle of the 21st Century. Five years ago, people were saying, well, geez, it's going to happen in about 2015. It's going to happen next year, and this is going to happen regardless of whether we act or not, but this is not a reason not to act. The reason that we would act domestically here in the United States is America is the center of innovation in the world in technology. We're better at it than anybody else is. This is mainly a technological challenge. We need innovation to fix greenhouse gas emissions or possibly even to subtract them from the air is now being talked about. Those innovations are most likely to come from the United States. We're Americans. We love challenges. This is challenge. This isn't going to end the world. The greenhouse effect is a challenge that must be overcome. What are Americans really good at? Overcoming challenges. So we start here. We enact some domestic program, hopefully, a sensible one that gives people an incentive to invent devices and come up with economic solutions. Then assuming that we do, and the history of air pollution issues is that Americans are really good at this. Remember, smog seemed unstoppable until we decided to stop it. Acid rain seemed unstoppable until we decided to stop it. We've had real good results in both of those categories and very cheaply, much more cheaply than projected. So we decide to stop greenhouse gases here. We come up with something cheap. Then we can turn to the larger world and say: Aha, now we have something cheap. Now, let's everybody use it. I think the larger world will be happy on that day. Let me focus the conversation a little bit on oil. Oil is only one of the sources of greenhouse gases in the United States, but it's one that gets a lot of attention for a number of different reasons, national security reasons as well as transportation reasons. Now that we see the average price of gas is up to about $3.20 a gallon, I think was the report this morning, Americans are very focused and paying attention to oil. But it strikes some observers that in order for us to really cut greenhouse gas emissions from oil, the price of gas may have to go higher. Give us some sense of that, David. You've written an Opportunity 08 paper on ending our oil dependency. How much does oil figure into America's greenhouse gas emissions? It's about a third of the problem, so it's a very significant piece. Here's an area where I think there is maybe the biggest bipartisan consensus. Actually, last summer, I had lunch in this room with Newt Gingrich and about 30 other people, and he fielded questions on a wide range of topics. About a month later, I had dinner with Howard Dean, also with about 30 people and fielding a range of topics. I asked both of those men the same question, which is what should we do about oil, and they basically gave me the same answer, Newt Gingrich and Howard Dean. Both of them said huge national security issue. Both of them said ethanol is an important part of the answer. Both of them said we need a Manhattan Project type research program. Both of them said the fuel efficiency of our cars must improve. So I think there is quite a consensus on the topic of oil. Thank you for the plug on my paper which is out there, and you can take a look at it. I think 25 years from now my grandkids are going to be looking at my kids and saying: What? You mean you couldn't plug in cars when you were a kid? That's so weird. What did you do? You had to go out to the gas station or something like that? I think we have a wave of technological innovation that's coming. I think electric cars are going to be very good actually for greenhouse gases. That's not widely understood. Even if you plug an electric car into a coal plant, you are producing fewer greenhouse gas emissions than if you run an internal combustion engine on oil, and that's because electric motors are so much more efficient than internal combustion engines. Ethanol is actually pretty good for greenhouse gases if you make it out of some feed stocks. If you make it out of corn, it's only slightly better than oil from a greenhouse gas standpoint. If you make it out of sugar or so-called cellulosic sources, it's a lot better. So there's a lot of things we can do on oil. Gregg, do you have a sense of the technologies around either cars or oil and how quickly you think they will develop? How important is the price signal? Do we have to have gas at $5.00 a gallon before car manufacturers or consumers start shifting their patterns? Well, there's been some shift already. I mean you've seen the sales of SUVs. The SUV fad is ending. In the short term, whether they should be done with prices or federal regulations is worth debate. You all know that some aspects of gasoline demand are inelastic. In the short term, there are a bunch of proposals in Congress, one from the President, one from Barack Obama, some others, to require annual improvements in the fuel efficiency of automobiles. We should have done that 20 years ago. I mean it's amazing how long it's taken to get around to that. That definitely should be done. It's a very doable technical objective with the technology that exists today. Now, what will draw out the great inventions of the future in automobile design, I'm not sure. When you get to the larger question of how to combine the national security concerns of our oil imports which are a real concern with how to discourage greenhouse gas emissions, basically all economists agree that a fossil fuel tax, at least a gasoline tax, but a fossil fuel tax would be preferable to carbon trading schemes. I mean the case for a tax as opposed to trading schemes is overwhelming in terms of simplicity and market signals and all those things that economists like. If you had a revenue-neutral carbon tax or gasoline tax where you'd pay more for your gasoline but some other tax would go down and especially you'd want to target the payroll tax that affects average people most. So if gasoline went up to $5.00 per gallon, but the average person's payroll tax went down, society would be better off, and we'd get the auto market pushing in the right direction. But I've just said the word, tax, and it's a word that you're not allowed to say. The current Congress is not going to impose a tax. We're more likely to get a cumbersome regulatory scheme, and I think we just have to accept that that's the political reality. Just two quick points, first, I'm reminded of a really good article that Gregg wrote on SUVs about two or three years ago which I just had the pleasure of rereading in The New Republic. Is that right? If anyone wants to look into SUVs, go find Gregg's article. That article, the title was "Axle of Evil." It's superb. Second, Gregg makes the point that demand for gasoline, in particular, is very inelastic, and there's a reason for that. The reason is there are no substitutes. It's kind of astonishing. If I'm thirsty and I don't feel like water or orange juice, I go get coke. I go get milk. I go get something else. If I want to go some place and I don't want to use gasoline, I can't do it. That doesn't seem odd to us because we grew up it. Our parents grew up with it. Our grandparents grew up with it. It just seems like the way the world should be, but in fact it's quite astonishing. There are no substitutes out there. So when the price of gasoline goes up, you have two choices basically -- you pay more or you drive less. I think actually that is the fundamental issue when it comes to oil. If we solve that problem, a lot of other problems could be addressed. David, one thing about plugging into the electric grid to power a car means that not only is it drawing energy from coal which does emit greenhouse gases but also it draws energy potentially from nuclear power. So a lot of advocates of nuclear energy have been saying, hey, this is a good way of addressing climate change. Does that work? Is nuclear really part of the climate change future? I think it's a very live part of the debate and one of the really interesting divides that we're going to see politically over the next number of years. If you go up to the Hill and talk to moderate Republicans about climate change, a lot of them are talking about nuclear and saying: We think that climate change is a very serious issue. Why wouldn't we expand nuclear in order to address it? I think anybody who cares about the climate change issue, in my opinion, has to be open to nuclear power. If we could generate large amounts of base load electricity without greenhouse gas emissions, that would be hugely beneficial for the global warming issue. At this point, nuclear technology has big problems associated with it and not the least of which are Wall Street and Main Street. These things are hugely expensive to build, very difficult to finance and just try locating a nuclear plant anywhere in the country right now. The public acceptance of this technology is very, very low. There are also unsolved problems in terms of nuclear proliferation and waste disposal. I think there are some real issues in terms of the growth of nuclear technology, but if you care about global warming, it seems to me you'd have to be looking at how it might be possible to solve those. Gregg, thoughts on nuclear? I'm certain that we're going to see a lot of new nuclear power plants built in the 21st Century, and they'll be amazingly technically advanced over the ones we have today. Remember, most of the nuclear power plants that are in existence today were designed in the 1950s, and the very last ones were manufactured in the late 1970s. We're using real old technology in nuclear power plants, and I'd rather see us switch to new technology. But we're going to see a lot of all kinds of electrical manufacturing facilities in the coming century. The basic estimate is that even if there's a huge increase in the efficiency of our use of electricity across the board, which I hope there will be, global electric power production needs to double or triple depending on where the human population peaks in the coming century, not only to supply the needs of the West but, much more importantly, to supply the needs of the developing world where electricity is scarce. The generation of electricity is going to increase very dramatically. The living standards of the developing world are going to increase very dramatically. I think most developing countries are going to be successful at increasing their living standards very dramatically. The people who sort of scratch their heads and say, well, the developing world can never live like us and on and on. They're going to all live like us amazingly fast. So global production of electricity is going to go way, way up. It's going to be a huge knowledge challenge to the world because we are going to simultaneously be concerned about reducing greenhouse gas emissions and making an enormous increase in the amount of electricity we generate. I think both things are going to happen at once, but it is going to be an enormous knowledge challenge. One more question, then we'll turn to the audience for some questions and comments. Without doing political handicapping of the horse race ahead, give us your sense. David touched on how the political forces in favor of addressing climate change have grown, increased interest from the business community and others. There are still some pretty strong opponents out there. Labor unions are still quite concerned and have talked about posting an energy tax on the border for those countries that haven't adopted greenhouse gas emissions like China and India. Congressman Dingell from Michigan still calls the Kyoto Agreement the most, I believe, idiotic agreement ever signed by an American President. Many of those opponents are on the Democratic side as well. Have the opponents to climate change gone away? Where will we be seeing a pushback in the next 18 months? I think in the coming election, everybody is going to say that they're in favor of action on climate change. I don't see any candidate who won't say that. The question will be whether they favor a substantive reform or some kind of symbolic action and whether they favor a wise program or a foolish one because there could be a big difference between the two. If you look at the recent political history, in the 2000 campaign between Gore and Bush, the existence of global warming was not controversial. Both sides believed in it. But whether to do anything was a clear political distinction. Gore said yes. Bush said no. In the 2004 campaign, you had the same dynamic. Neither side challenged the danger of global warming as an issue, but again Kerry said do something, Bush said don't. I think, in 2008, all candidates will say we have to do something and the question will be whether the action is substantive or not. So, David, are there benchmarks or markers that we should be looking for from the candidates to see if they're really serious about this? Let me just say as an historical footnote that actually George Bush in 2000 did say that he wanted to take this issue on, but it wasn't until he came to office that he said something different. To answer your question, Bill, I think it has to do more with the level of attention than any specific policy selection. I think you will see, over the course of the next year, some candidates paying a lot of attention to this issue, other candidates paying less attention to this issue, and that's where the main divide is going to be. Great. We have time for some questions from the audience Two of our colleagues here have microphones if you could wait for a microphone Tell us who you are and where you're from and then ask your question.