My fellow Americans:
When I took office six months ago, I made it clear that my highest priority would be addressing the financial crisis that overcame us in 2008. As you well know, all indicators now point to the beginning of a slow—but hopefully steady—return to a solid growth economy.
As complex as it has been to unravel the financial crisis, global climate and energy issues present an equal, if not greater challenge. For more than a century, our economy—like most economies around the world—has relied on fossil fuels to power our homes, our cars, and our livelihoods. Remember that our awareness of the issue has only truly crystallized over the past two decades, as scientists began to suspect that these activities might have long-term ramifications for our climate system here on Planet Earth. And after decades of intensive scientific research using increasingly sophisticated climate metrics, models, monitoring systems, and computing power, we know that there is a scientific consensus about our warming world, and we know that the debate is over.
We also know that we run a grave risk of making our planet a very different place from the one we know today, and in the worst of scenarios, one that is virtually uninhabitable by our children, and our children’s children. This is not something we can continue to speak about in the future tense—it is a present tense problem with immediate impacts that are already being felt by a growing percentage of species, including our own. Humankind, because of our remarkable ability to adapt and control our environment, may be able to stave off the worst of these impacts for some time. But some day in the not too distant future, we will inevitably begin to witness those changes already being felt by our fellow Americans in extreme environments like Alaska, at an unprecedented scope, scale, and speed.
This is an issue of staggering moral, political, technical and economic complexity. Our economy is predicated upon trillions of dollars of assets that emit fossil fuels—our cars, our power plants, our factories, and our homes. It will take decades to transform these carbon-based assets to the low and zero carbon equivalents that science tells us we need. My predecessors in the White House who faced this web of complexities appeared to hope that either a change in scientific consensus, or the emergence of miraculous technological solutions, would solve the problem. Unfortunately, the path will not be that easy.
That is why in the early days of my presidency, I ordered a full interagency review of what we could do as a country and a world leader to stabilize the global climate as a matter a national urgency. I am here to give the American people my first report on the direction I will set as President for the future, based on the results of that review.
For far too long, we have treated the atmosphere as an unlimited dumping ground for global warming pollution. Carbon dioxide from the use of fossil fuels—oil, coal and natural gas—has increased in the atmosphere more than 70% since the beginning of the industrial age and the growth is accelerating, not slowing. Therefore, as a first step, we need to find ways to limit this dumping. A strong first step is assigning a cost on this activity.
The two ways of doing that are to tax fuel according to its carbon content, or creating a market whereby companies must obtain a permit to emit and therefore have incentives to make reductions. We will use both taxes and markets, but we will do so in ways that are revenue neutral to the country. What people and companies pay to emit carbon will be adjusted for in incomes, taxes, and other costs. However, as we tighten our overall emission cap over the decades to come, it will be those that are the most carbon efficient who will flourish.
For markets, I propose a comprehensive cap-and-trade system on large scale emitters. At the program’s outset, we will distribute allowances to industry based on average historical emissions. Each year through 2030, the total amount of allowances provided by the program will decrease by one percent. After three years, we will begin auctioning a portion of the allowances each year—with that portion ratcheting up every year until we reach 100% auctioning in 2025.
Because we must also start pushing the technology curve of what is possible, the government will be supporting the development of a series of new climate friendly technologies. Just as the government helped incubate the internet for more than 20 years before it became a fixture of the American household, so must the government lead the charge in supporting clean coal technology, whereby the greenhouse gas pollutants are captured and piped back underground. The Department of Energy will also be ordered to fast-track approval for so-called small-scale “pebble” nuclear reactors, which can provide bountiful clean energy while avoiding the safety and waste disposal issues that plague our current nuclear fleet which was designed more than half a century ago. For our renewable energy development efforts, I am proposing to make the production tax credit for clean energy refundable, and to extend it for 20 years, so that manufacturers and developers can feel safe that this vital support is not going to be cut back at the whim of some future Congress.
And because the solutions are not “one-size-fits-all,” we must create incentives for small scale, distributed renewable energy resources that will make energy self-sufficiency and independence accessible for every American. Therefore, I propose a federal net metering law that would ensure small scale renewables like residential solar installations under 1MW receive retail prices from utilities for all the excess electricity they generate. Doing so will transform our rooftops from empty space to a useful source of power generation, and in so doing will alleviate the potential pressure being put on desert and other expansive landscapes from utility scale solar and wind installations.
As the transport of the future will be plug-in electric hybrids, we will need much more electricity—not less. This means that all our new electricity will need an electric grid that is built for the 21st century, not the 19th. My administration will build out new transmission lines that will bring the great wind resources of the upper Midwest and the tremendous solar power of the Southwest to markets where demand for energy is the greatest.I am ordering the Federal Electrical Regulatory Commission to work expediently to fast track smart grid development for zero-carbon energy resources – whether they are renewable, nuclear or clean coal.
Even with these changes, the process of progress will be a long one. Changing over the US infrastructure to a low carbon economy will take decades, not years. Understanding this, I am committed to taking those decades and to doing it right. Along the way, there are opportunities to reduce emissions beyond our borders that are comparatively cost-effective and which in many cases provide local benefits and export opportunities for our American products and technologies. Over the past five years, other countries have picked up on an idea pioneered by the United States, and created an investment process—the Clean Development Mechanism—to generate emission reductions in developing countries. It is possible to reduce emissions in certain developing countries for just a fraction of what it might cost in the United States, Europe or Japan, and these emissions have no different impact on the climate whether they are emitted in my father’s home country of Kenya, or my mother’s home state of Kansas.
Six months ago, I asked Secretary Clinton and Secretary Geithner to co-chair a task force on how the Clean Development Mechanism has worked, both for the environment and for business. Based on their findings, I am endorsing the use of this system to supplement our country’s emissions reduction commitment. Our endorsement is not a blank check – we believe that the system can be improved, and our negotiators to the global climate conference in Copenhagen in 6 months will be tasked to agree to its continuation on the condition that several significant reforms are agreed upon.
However, to support our position in the global discussions, I am pleased to announce today that we have reached a framework agreement with the government of China in this regard. China, as we all know, has become the world’s largest emitter of greenhouse gases, though on a per capita basis, it still take four Chinese to emit as much as a single American.
As part of this accord – negotiated by Secretary of State Clinton – the US and China will work together to jointly manage our future emissions trajectories. We will jointly remove all tariffs on greenhouse friendly technologies between our countries and China has agreed to protect American intellectual property on key technology developments that we export. China and the US will then jointly promote a global regime of zero tariffs of greenhouse friendly technologies, working through the WTO. China has agreed to take on initial caps in certain heavy emitting sectors in the next several years, while the US and China will jointly develop efficient protocols for creating large scale emission reductions though a revamped Clean Development Mechanism.
Deforestation in tropical countries contributes 20% of the carbon to the atmosphere that is currently contributing to global warming. Around the world, 36 football fields of untouched tropical forest are chopped down or burned every minute of the day. Many of these forests are felled for reasons that are economically irrational, particularly in light of the devastating amounts of carbon their destruction puts into the atmosphere. I am therefore supporting the protection of threatened tropical forests as a mechanism for the United States and other industrial countries to help meet aggressive emission reduction targets.
As a first step in this regard, I am pleased to announce that the United States has signed an agreement with the Government of Indonesia to try out some initial solutions to this problem. We are also actively engaging other governments in Asia, Latin America and Africa to make similar agreements. While these types of arrangements are not a substitute for transitioning to a low carbon economy, they can help buy us more time for the changeover and accomplish another enormous good at the same time. We are therefore strongly encouraging our counterparts in Europe, Japan, Canada, Korea and Australia to do the same.
The climate question is the defining challenge of not just our generation, but that of our children, grandchildren and great grandchildren. It is my hope that when my daughters Sasha and Malia are grandparents, they will be able to look around and realize that the thousands of changes that seemed so challenging today – both large and small – have built the engine of a new economy that put our species in greater harmony with God’s greatest creation.
Former Vice President Gore has often called the climate crisis a planetary emergency. America has never shied from a challenge and had always been best when leading the world with ideals behind which all countries rally. This is more than an ideal – it is an opportunity to create new businesses, to innovate around brilliant new ideas and to reorder the way that we do nearly everything. It will again be a time that we will be proud to say that we are Americans and we indeed changed the world for the better yet again.
Thank you, and God Bless America.
Marc Stuart is the Co-Founder and Director of New Business Development for EcoSecurities, a global carbon trading firm. The views expressed are his own and do not necessarily represent the view of EcoSecurities