Transatlantic Dialogue on Climate Change Innovation Drivers

1. Transatlantic Dialogue on Climate Change Innovation Drivers by Kevin Fay Executive Director International Climate Change Partnership November 20, 2004 Villa Vigoni, Loveno di Menaggio 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

2. Principle Industrial Drivers for Innovation • Governmental Policy • Market Response to Supply and Demand • Consumer Demand 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

3. U.S. Federal Legislative Policy • Comprehensive Energy legislation • Energy tax initiatives • Clear Skies legislation • Carbon cap and trade legislation 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

4. Federal Regulatory Policy • Registry issues 1605b • Mercury rules • New Source Review rules • Methane to markets 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

5. 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 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

6. The global energy picture • Increased prices for oil, gas • Increased demand • Secure supplies? 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

7. Projected U.S. Growth Rates Source: U.S Department of Commerce, Bureau of Economic Analysis; U.S. Department of Labor, Bureau of Labor Statistics 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

8. Projected U.S. Electric Growth Source: Energy Information Administration, Annual Energy Review 2002, Department of Energy 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

9. 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. 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

10. Industrial Response • Coal vs. Gas • Nuclear comeback • LNG • Technology vs. fuel switch 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

11. Access and Supply • NIMBY (Pipelines and Terminals) • New exploration horizons and regions 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

12. Consumer Demands • Clean vs. Dirty • Cost of operation • Reliability • Availability 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

13. 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 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

14. 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 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

15. Where’s the Big Bang? • Utilities • Transportation 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

16. Global GHG Emissions - 2000 Source: www.epa.gov/methanetomarkets 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

17. 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 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

18. Technological Breakthroughs Will Save Trillions of Dollars While Stabilizing 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. 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

19. Developing Carbon Capture and Sequestration Technologies Can Save Hundreds of Billions of Dollars 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. 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

20. Improvements in Energy Intensity Achieve Significant Emission Reductions Source: Edmonds, Jae, 2004. Presentation to the Annual Meeting of the Global Energy Technology Strategy Project. 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net

21. 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 2111 Wilson Blvd, 8th Floor, Arlington, VA 22201 Phone: (703) 841-0626 Fax: (703) 243-2874 www.iccp.net