Transatlantic Dialogue on Climate Change Innovation Drivers by Kevin Fay Executive Director International Climate Change Partnership November 20, 2004

Transatlantic Dialogue on Climate ChangeInnovation Drivers

by Kevin Fay

Executive DirectorInternational Climate Change Partnership

November 20, 2004Villa Vigoni, Loveno di Menaggio

2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

Principle Industrial Drivers for Innovation

• Governmental Policy• Market Response to Supply and Demand• Consumer Demand


U.S. Federal Legislative Policy

• Comprehensive Energy legislation• Energy tax initiatives• Clear Skies legislation• Carbon cap and trade legislation


Federal Regulatory Policy

• Registry issues 1605b• Mercury rules• New Source Review rules• Methane to markets


Individual State Actions

• Northeast (Regional Greenhouse Gas Initiative)

• California: Hydrogen Highway and Carbon reduction on autos

• Southwest Gov’s Coalition and renewable mandates at the state level


The global energy picture

• Increased prices for oil, gas• Increased demand• Secure supplies?


Projected U.S. Growth Rates


Source: U.S Department of Commerce, Bureau of Economic Analysis; U.S. Department of Labor, Bureau of Labor Statistics

http://www.eia.doe.gov/oiaf/aeo/figure_38.html


Projected U.S. Electric Growth


Source: Energy Information Administration, Annual Energy Review 2002, Department of Energy











Significant Improvements in Existing and Development of New Technologies Are Required to Stabilize Concentrations


Source: Edmonds, J.A. and G.M. Stokes. 2004. “Launching a Technology Revolution,” in Climate Policy for the 21st Century: Meeting the Long-Term Challenge of Global Warming, The Brookings Institution, Washington, DC.

Industrial Response

• Coal vs. Gas• Nuclear comeback• LNG• Technology vs. fuel switch


Access and Supply

• NIMBY (Pipelines and Terminals)• New exploration horizons and regions


Consumer Demands

• Clean vs. Dirty• Cost of operation• Reliability• Availability


Future Business Issues for Attention

• Be engaged in all various global efforts• Maintain ability to capture early actions

regardless of regime• Enhance the opportunities for global

trading system


Macro Points to Monitor

• Assure that changes in demand will be supported by supplies and infrastructure

• That regulatory actions provide certainty and clarity for investment returns

• Flexibility in the ability to meet future targets


Where’s the Big Bang?

• Utilities• Transportation


Global GHG Emissions - 2000


Source: www.epa.gov/methanetomarkets

U.S. Carbon Emissions by Sector


Source: U.S Department of Commerce, Bureau of Economic Analysis; U.S. Department of Labor, Bureau of Labor Statistics

Technological Breakthroughs Will Save Trillions of Dollars While Stabilizing Concentrations



Developing Carbon Capture and Sequestration Technologies Can Save Hundreds of Billions of Dollars



Improvements in Energy Intensity Achieve Significant Emission Reductions


Source: Edmonds, Jae, 2004. Presentation to the Annual Meeting of the Global Energy Technology Strategy Project.

Conclusion

• We need a quantum leap vs. an incremental gain

• We need to provide markets to step forward and provide most of these developments

• We need business and government to work across all of the political time zones


Documents

Transatlantic Dialogue on Climate Change Innovation Drivers by Kevin Fay Executive Director International Climate Change Partnership November 20, 2004