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henry jacoby

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What makes the issue of global warming a significant one, in your view?

We don't really know how serious it is yet. But the potential is that it might be quite serious. That is, the change in climate, temperature, and rainfall...the potential for changes in storminess, extreme events like droughts and floods and the like...the potential over the century is substantial. We don't know, but the potential is there. And since we're building up this stock of greenhouse gases in the atmosphere and they don't go away fast, it makes a big difference when you start to deal with it. It's a substantial long-term social problem, in my opinion.

But from a policy standpoint, it's difficult to get people to care when there's no imminent threat. We don't even know the signals here, do we?

I often say, if we'd sat down and spent a day trying to think of a problem that we couldn't deal with, we'd have had a hard time designing one that's worse than this, because you're talking about changes that are long-term. If we have emissions going on over the last 100 years, the next 10, 20, 30, 40, 50 years, the effects of that are not really effects on us. They're on our children and our grandchildren...long-term future effects. And it's uncertain. So there's not the urgency, let's say, of breathing dirty air today. We're doing something today that's going to influence the conditions in the future.

And then it's even made worse by the fact that there's not a really convenient, easy villain here. The villain is us and the level of economic development we have and the energy and other chemicals that we use to support our standard of living. And it's not a problem that any one country could fix. United States can't fix it. Rich countries can't fix it. You have to have some sort of a cooperative agreement that brings lots of nations--not all the nations but lots of nations--to play, in order to deal with it. Well, making cooperative agreements across people with very different interests over long periods of time, for a problem that's uncertain--it's hard to imagine a worse problem than that.

The world has come together in other examples--to try and prevent the spread of nuclear weapons, or with pollutants like CFC's. Why is this different?

Well, let's take those two examples. It's different from the nuclear weapons case, first of all, because nuclear weapons was a more immediate, a more immediate and devastating threat. But also, the nuclear weapons was really a matter of us and the Russians. There were two players. There were not fifty players.

It's different from the CFC question in a couple of ways. First of all, the CFC issue was cheap. We were able, thanks to the technology that was available, we were able to find substitutes for CFC's and go right along. Most people are unaware that we did anything about CFC's. It was possible with public pressure and learning and creative negotiation and public response, political response, to actually solve that problem. But it was cheap to solve problem.

The other thing that made the CFC issue different from climate is that there was an "aha" moment in the CFC question. That is, at one stage it was discovered that the ozone was disappearing in the Antarctic in certain seasons of the year. It was not understood exactly why that was happening, but not only was it happening, it was possible to take satellite pictures of it. So all of a sudden there was a silver bullet. There was the clear indication that something's happening, and the science to link that to what we were doing. And I think that had a big effect on public perceptions. The public perceived we are doing something to change an important balance in the earth--in this case, the ultraviolet radiation balance-- and that provided a political push.

In the climate area it's much more complicated than that. The climate system is very noisy. It's very hard to know what's going on. What might take place is taking place over decades to a century. So the climate issue doesn't or has not yet provided a clear, kind of unavoidable, signal that it's happening.

The smoking gun?

The smoking gun. Right.

It's different in another way. Carbon dioxide is not a traditional pollutant. It is central to our way of life. This is a byproduct of fossil fuels. This is very, very challenging because it emerges from everything we do, practically.

Yeah. I mean, modern industrial society is driven by energy. Now, there are lots of sources of energy. There are renewable sources of energy, and there are fossil-fuel sources of energy--lots of ways we can generate energy to support the modern industrial society. The cheapest way--certainly over the last century--to do that has been with fossil fuels. So electric power, transportation, a lot of space conditioning--appliances, that is--the things that make for the modern wealth life are driven by energy. That is, we've substituted fossil and other energy for human energy. And it's possible to imagine driving those systems with energy that's not producing so much carbon. That's possible. It's possible to imagine living at the level that we're living--with less energy. That's also possible, by being more efficient. But it's not possible to live the life we do, moving around the way we move around, without a substantial use of energy. And the cheapest way to do that is with fossil fuels. So that the way we live is going to generate CO2 until we devise some other system to do it.

But these fossils fuels, it's not just that they're cheap, is it? They are very convenient. They're very concentrated sources. You can move them around easily. They've made society possible. Cars, for instance, have been made possible by petroleum.

Sure. I mean, the fact that they're in concentrated sources, like oil wells, coal mines--not spread out all over the landscape. Let's say, if you're growing trees and trying to use them as a source, or use other kinds of biomass sources, which the economies were based on, let's say, from 200 years back--it was based on those sources. But all that which you described--easy to move around, available in concentrated sources...that's all part of what I mean by being cheap. That is, they are the least-cost way to develop, to generate electric power or to move vehicles or to run appliances.

What kind of threat, potentially, does this pose, first to the developed and then to the developing nations? The idea of having to decarbonize or having to do something about this.

If you're going to try to decarbonize, you're going to have to drive up the price of energy. So, the main thing is that they would face the development of industries and, you know, development of housing and other amenities--transportation and the like--with much higher energy prices. And that would be, to some degree, not devastating but, to some degree, a drag on economic have to achieve that with much higher energy prices than we experience.

But it would be a drag for the developed nations too. How important are low energy prices to modern economies?

For the modern economy, like the United States, Europe...we're rich. We could stand higher energy prices. The price of energy in the gross domestic product is very small. It's less than 5 percent. We could stand that because we're rich. I mean, there are people of lower incomes who are affected. You can't raise their gasoline and fuel prices without them seriously feeling it. But compared with the rest of the world, we're, of course, very, very rich. A lot of the world is not rich. And for them to try to develop with fuel prices that are much higher than the ones they have now would be a drag on their economic growth.

A serious threat to their development?

I don't think a serious threat. I mean, the notion "serious threat" sounds like they couldn't develop, or their growth rates might be cut in half or something. That's not the case. But their rate of growth could be slowed down. It's hard to say how much it would slow down, because it's hard to specify the restrictions we're talking about. But if you thought that you were going to try to restrict their energy growth to something like what it is today, or twice what it is today, it would be very, very difficult for them to achieve the economic growth we've had. They couldn't do that.

What about the international political process that has led us to where we are. What, in your view, is the driver for having international action in the beginning? The Rio conference and so forth.

A lot of international concerns with what we're doing to the biosphere and other aspects of the environment came together in Rio, combined with a whole set of issues about income distribution and north-south issues and the like. So, Rio was a kind of a collection point for issues ranging from forest to biodiversity to climate to income distribution to urban cities and such. So a lot of concerns came together there. The Rio conference became a convenient deadline for completing the climate treaty. It kind of got on the was coming into the station at Rio. And that drove the climate negotiation process to produce the Framework Convention on Climate Change.

By 2010, achieving Kyoto would yield a lowering of energy consumption by about 1- 2 percent.  It requires increases in energy  prices. Now, a lot of things had gone on before. There'd been studies by this international or intergovernmental panel on climate change. That had been going on. Negotiations had been started earlier on this issue among the nations. And Rio provided a convenient closing point for that.

The motivation for it was that there was growing scientific evidence that this might be a problem. There were weather events --like the drought in the United States in the late 1980s--that raised public awareness of it. There were important political leaders who became convinced that this was something they wanted to carry as a part of their own personal platforms and the like. And that all came together at that time. And since then, we've been struggling to try to figure out what they might mean, since the treaty doesn't actually require anybody to do anything. It's a framework. It's a structure within which they can agree to take more stringent action.

Early on, the world was divided into two groups, annexes?

There was a division at the time the treaty was made into what's called Annex I and Non-Annex I. Now, the Annex I countries were the rich countries, essentially--the OECD countries--Europe, United States, Japan, Australia and New Zealand, Canada. They're supposed to do something first. For geopolitical reasons, the countries of the former Soviet Union and Eastern Europe were also put in that group. They're much lower-income, in general, than the OECD countries, but they were put into Annex I as well. So there was a division between Annex I and Non-Annex I. Non-Annex I you can think of, roughly, as the developing countries, although some of those developing countries--(like Singapore--are richer than some of the Annex I countries--like Romania, for instance. But that was roughly the division.

So the argument at the time was that the Annex I countries were the rich ones. We were the ones that had put the CO2 and other gases up there that are there now. We had created that problem. We were supposed to go first. And then later there might be something that would involve the Non-Annex I countries. But right at start in the negotiations, the developing countries insisted that they be treated differently, that they not be asked to take any commitment--or even any implicit or contingent commitment--to actually reduce emissions, although they made some commitments to provide data and to participate in other ways.

But their feeling was they hadn't caused the problem? Or they just didn't need to be burdened with this?

I think, both of those. And there is a strong feeling they didn't create the problem. They're poor. We're rich. The gases that are up there are not their gases. They're our gases. We should do something first. So there is a sort of: "You go first; you did this" or "You did this thus far" kind of mentality.

There's another sense in which it's just not high on their political agenda. I mean, we have environmental problems. This one fights for attention among other environmental problems, like particulates and toxic waste and water pollution and the like. But in developing countries, in the very poor countries, this is farther down on the list of things that they want to be concerned with. You know, you have countries that are still dealing with leprosy and malaria and such. Climate change is not high on their agenda.

Is this, in your view, a fundamental decision that makes a lot of things flow from this, dividing the world into two camps? Take that original conception. Can the Annex I countries solve this problem by themselves?

No. I think, in a sense, there's a kind of a tragedy here, in that this division was probably unavoidable because of the global politics of wealth and north-south issues. But, in a way, to make such a clean division right at the start was a mistake--created a big problem. Because you now have two classes of countries: those classes are somehow obligated to do something, and those that are not obligated to do something. But under the climate treaty, you're not even supposed to put on the agenda to discuss what they might do when they get rich. That is, the discussion is completely split. And that's very unfortunate because you cannot solve this problem with the developed countries.

Why not? Prove to me that you can't.

If you take the developed countries and the underdeveloped...within the next fifteen years or so, the Non-Annex I, the less developed countries, are going to surpass the developed countries in total contribution to emissions in the atmosphere.

Within twenty-five to fifty years?

Less than that: fifteen to twenty years. And you have relatively stable rates of population in a lot of the developed countries. In Europe, population growth is near zero. It's quite low in the United States, and falling in some areas of the Soviet Union, or potentially falling. Growth rates have been satisfying in the United States and Europe, though not so good in Japan. The growth rates are quite a bit lower per capita than they are in the developing world. So in the developing world you have both higher rates of population growth and higher rates of economic growth, which means they have a huge potential growth in greenhouse emissions as they develop their electric power systems, their transportation systems, and the like.

So even if we take dramatic changes in the developed countries, it doesn't solve the problem because the growth in the less developed world is so great. The split between the two creates a big problem. They don't want to do anything unless we go first. But it is also reasonable for us to say, "Hey, wait a minute. It doesn't help for us to do this unless we have some kind of agreement with you that when you get to particular levels of income and ability, you will also join in." And that's the kind of impasse that's in this discussion now.

You can analyze it from an individual point of view, a per-capita point of view, and say: The average American produces five tons of carbon a year. The average Indian, less than a ton or something. Viewed like that, doesn't it seem quite justified to say: Why expect the Indian to do anything yet?

That's right. Oh yes. It is quite reasonable to say that. That's why I say it's a tragedy. Both sides of this argument are quite reasonable.

Now, all developing countries are not India. There are lots of developing countries in Non-Annex I that are a lot higher income than India. So in the Non-Annex I countries, you have a whole spectrum of countries, countries like Singapore or Korea or Argentina or Chile, which are growing quite rapidly and are achieving better standards of living. At some period of the next ten or fifteen or twenty years, you would expect them to reach an income level where there was some obligation for them to join--to get on board as well. The problem is not India.

We've often done calculations when we said--sort of hypotheticals--what would happen if developing countries took some responsibility when they got to half the income of Europe today? Now, that's Portugal. When they got to the level of Portugal today, they begin to take action. Your forecasts are, of course, uncertain. But India doesn't get to that till way into the second half of the next century. China doesn't get to that stage until near the middle of the next century, by our forecasts. But a lot of other countries are already there. So what's unfortunate is, we have this division where all the developing world is on this nonparticipation side of the ledger. What I'm saying is unfortunate in the clear division between Annex I and Non-Annex I is that--and this really happened in a meeting after Rio; this really happened in a meeting in Berlin in 1995, where this clear split was made--even discussion of the more wealthy of the developing countries coming onto the treaty when they reach a certain level of income is not allowed in the treaty discussions. And this essentially is, of course, the developing countries holding back and taking exactly the argument that you're suggesting, which is: You come talk to us when you've done something, but don't ask us to make even contingent commitments until you do something. And that's the state of the international discussion now.

Try and lay out for people, as an economist does, this issue of where carbon comes from.Tell me why it's so difficult to view this as a national as opposed to an international problem.

The level of carbon emissions is a function of economic growth and the technology that we use to fuel that growth. And let's remember that we're not just talking about carbon dioxide. There are also other gases that are important, like methane and nitrous oxide. But just focusing on carbon's convenient to understand the structure of the system, to divide it into four parts. You start with how many people are. There's the growth in population. And then there's how much income level there is per population. That gets you to--

Standard of living?

Standard of living. So there's the total number of people. Then there's the standard of living.

Then the third component is: What is the amount of energy...what is the energy intensity of that standard of living? For example, we have a standard of living that's, let's say, roughly comparable to that of Japan. We're somewhat richer than Japan, but in world terms, we're roughly comparable to Japan. But our standard of living is a lot more energy-intensive than the Japanese standard of living. We drive farther, and our houses are larger, and we spend more energy cooling them and heating them and such. So that our standard of living is more energy-intensive than the Japanese standard of living.

So that means we use energy less efficiently? Does high energy intensity correlate--

It is both efficiency, but it's also a different structure of the country. That is, you know, it's a long way from here to Chicago. It's not a long way, in Japan, from Tokyo to Nagano, or something. So it has to do with the geographical structure of the country, as well as the level of living and the kind of style and such. That's the third component.

Fourth component is: We're now down to how much energy there is. Then the question is: How carbon-intensive is the energy? And some countries have a very carbon-intensive energy source, and others have a less carbon-intensive energy source. France is another country that's not quite at the level of income of the United States, but for this discussion you can say France and the United States are roughly equivalent. Somewhat less energy per unit of living. But about 80 percent of France's electric power is nuclear. So France has a much lower energy intensity, lower carbon intensity of their energy use, than, let's say, United States, where we generate a large--the major portion--of our electric power with coal.

So you multiply all those together: population, times the income per head, times the energy intensity of the income, times the carbon intensity of the energy. Those are all the components. In the first two, you have the level of economic growth of the country overall--population and the wealth of the population.

So take those--

And the second two really are related to technologies.

So take the first two terms. What is the expectation for the world on the first two terms? So population and standard of living. Do they go up or down?

Oh, I think that they go up. Now, economists get nervous forecasting more than about two or three quarters. And certainly, five years is, or used to be, a long-term forecast. Twenty years was really a long-term forecast. So we're now talking about a century. So you have to kind of hold onto your chair when you forecast a century, because lots of things can happen. But I would expect--and I think that most economists would expect--performance something like the last century, that the rich countries will continue to grow slowly. won't grow as rapidly as developing countries are growing now. And the developing countries, many of them have high rates of saving. They have the ability to bring in the technology that's available in the developed world and get the advantage of that to get their productivity up.

So countries like India and China and Indonesia and countries of Latin America, countries of Africa, have the prospect of substantial economic growth over the next century, and I think people expect not a complete closing of the gap of incomes, but you expect those countries to be substantially wealthier at the middle or the end of the next century than they are today. So the level of income goes up.

So the first two terms in the equation go up fast?

Well, let's divide it, because the population growth in the developed countries--particularly in Europe, in Japan, less so in the United States--the population growth is slowed down a lot. And it has slowed down in a lot of the other countries. We now have 6 billion people. Well, where is this going to peak out? Where do people think that might go? Well, nobody knows, but it's somewhere in the range of 10 billion to 15 billion over the next century. So that we're going to have half again as many people to twice as many people as we have...I'm sorry...we might have twice as many people as we have now, by the end of the next century. So population is going to grow. Even if you correct for declining birth rates and so forth, you just take all the people that are coming into the childbearing ages and you kind of crank them get more people. And death rates are falling, for good reasons. So population grows.

And then there's investment and technological change, which is going to produce a productivity improvement, which is going to produce growth in per capita income. And countries like China and India and a lot of the countries of Asia have, over periods of decades, very high growth rates.

Now, Asia's got a problem now, but I think most people--

We would expect these people to get richer as well?

Yes. We have troubles in Asia now. They're deep troubles. But I think people expect, over the horizons that we're talking about --hat is, we're talking about horizons of decades to a century--that they're going to straighten that out. They're going to come back. Those countries are going to find ways to correct their political circumstances; they have well-educated, intelligent populations; they're able to achieve quite high savings rates; and they have the technology that can be brought in from the developed world. And so you would...I would expect this to be a maybe five- to ten-year problem that they have, but it's not a problem of a century, for some very large and potentially rapidly growing countries in Asia. Similarly in Latin America, Africa.

So these economies grow. So people get richer. Do we expect these people to consume more energy because there's more economic activity, because they've got more refrigerators, cars? What's the expectation?

Well, if you're living in a hot Chinese city, you want an air conditioner. First you want a television set, and then you want a fan, and then you want an air conditioner, as you get more wealthy. And you would do that. I would want to do that. And once you have an air conditioner, and the television set, then you'd like to have a car. And it's going to be very difficult for those countries to take a path of transportation and appliances and sort of standard of living that is dramatically different from the one we took.

Now, I'm not saying it won't be different. You simply can't put the number of cars per capita into Chinese cities. But the demand is going to be there, and there's going to be continual pressure to develop a level of life that's perhaps not U.S. standard--I don't believe that--but maybe at the Japanese standard.

So the first two terms in our equation are likely to be sharply up.

Let's say, up. Yeah, up.

We're talking about population double, living standards double--

Over the century, yes. And population doubled for many of these countries. Income may grow by a factor of five or ten. So, yes. You're talking about income changes that--total income population multiplied by per capita income, which might be up by a factor of 10. I mean, after all, per capita income in the United States is something like $10,000 a year. What is it in the poorest countries? You know, between $500 and $1,000. Maybe less. So they have a long, long way to go, per capita. And they will close some of that gap over a century.

So, then, what do we do with the third term? The third term is the intensity of energy used. Are there some options? Historically, what happens to societies with this term?

The third term, which is the energy intensity of the economic activity, this is really the conservation point. That is, you could have more or less gas-guzzling cars. You could have more or less efficient air conditioners. You can have more or less efficient building designs. You can have more or less efficient appliances of all kinds. More or less efficient lighting systems. So admitting the differences between countries in their structure--that is, the kind of industries they have, and how far apart cities are and such, how far people live from work and the like--the major potential here what we conventionally call conservation, which is possible changes both in the technology and in the choices we make about how energy-intensive the devices are that we use.

So a particular example of that is, I can choose to buy a sport utility vehicle, or I can choose to buy a small sedan to provide not exactly the same services but similar services. And governments can have some influence on that through taxation, regulation, and the like. As I say, some of this is built into the structure of the economy. It's not easy to change. But part of it is easy to change. And the main thing that it is responsive to is the price of energy. So the major instrument there to influence that is energy price itself. And with gasoline at 95 cents a gallon, it's not surprising that people buy big vehicles. It's essentially free to drive them.

How much scope is there for this, in principle? What kind of bite out of the carbon problem could we make with this term, if we really pursued it aggressively?

One of the standard numbers that people have looked at, since it's been negotiated and discussed a lot, is: Could we, over a period of ten to fifteen years, reduce our energy and carbon use to achieve something like the Kyoto targets, which would be not reduce energy use by a third, but essentially to reduce carbon emissions by about a third from what they otherwise would be, let's say, 15 years from now. Could we do that?

The answer's yes, I think we could do that. If we started now, we could do that by a set of measures--mainly by raising the price of carbon-producing activities. That would require reduction of energy consumption below what would otherwise be done in perhaps a quarter. And that could be done, sure, by changes in efficiency, changes in use, changes in patterns of consumption.

I don't like people who use this notion that it's devastating. It's not devastating. It would be costly in terms of the prices of fuels, prices of electric power, and particularly strongly affecting some sectors and regions of the country.

Now, if you don't like to do it that way, you can control the carbon with the fourth term, can't you? You don't have to do it all through efficiency. You could, in principle, do it with the carbon-intensive--

That's right. The third way would be fuel substitution. And substitution of non- or less carbon-intensive forms of energy. Now, what are the obvious choices there? The most obvious, and certainly the first, target is the use of coal in producing electric power, because it would be possible, in the United States in particular, with the sources of natural gas that we have from the United States and from Canada and Mexico, to do a substantial shift of electric power generation from coal to natural gas. Now, natural gas has much less carbon emissions per unit of electricity generated than coal does. So that's one example of substitution.

You could substitute other low-carbon sources: wind, solar. They're going to be small, but we should forego them if they're economically competitive. Nuclear is another noncarbon-emitting opportunity.

And finally, something that is being studied a lot now is that it would be possible even to use coal and natural gas in electric power generation and to capture the carbon, to not let the carbon go into the air. And there are technologies to do that. It's possible to generate or to create automobile fuels that are made from coal or natural gas or oil, but where you capture the carbon and don't let it go into the air. Now, those, right now, are expensive, and they are a subject of R&D, but that would be a way to use energy--that is, a total amount of kilowatt-hours or BTU's of energy--but release less carbon along the way. And the question is: How soon could we do that? How much are we willing to pay to do it? What would it cost?

Now let's talk about what Kyoto asked us to do, and what it would take to actually solve the problem, because they're two rather different things. Kyoto is just a freezing at a 1990 level or a few percent below, isn't it?


First of all, why do people scream and shout when you suggest something like that, which is modest compared with what you really have to do to solve the problem?

To achieve Kyoto in a short period of time is going to [involve] substantial cost. According to the calculations that we've done, you would need a price of carbon of somewhere in the neighborhood of $200 a ton. If you converted that into a price of gasoline, that would be maybe 50 cents a gallon. If you converted it into price of electric power, it's substantial. The price of coal would go up by a factor of three or more. The price of natural gas would go up substantially. The price of oil would go up. So that the prices that people pay for oil, coal, natural gas, and electric power would all go up.

Would that cause the economy to go into a recession?

No. This is not the kind of circumstance that intelligent policy would impose--in a shock. It would be imposed gradually over time. So that it would have some dragging effect on the U.S. economy. You're diverting resources that we could be spending on consumption. We're spending it on getting rid of the carbon, so it's going to drag the economy down some.

Most estimates show that by 2010, achieving Kyoto would yield a lowering of consumption in those years by about 1 to 2 percent. But it requires increases in the prices of energy. That, of course, is more difficult for people of lower incomes. It has particular effects on particular regions of the country. If you're in West Virginia or the coal-producing regions of the West, it could have quite a substantial effect on you. And then there's the question: How do you achieve that? It's got to be achieved, in some way, by either regulation or prices. These then involve political changes in the way we run our economy, which a lot of people oppose, or they're worried about the intelligence of the policies that might be followed.

How are we doing with regard to our Kyoto target here in the United States?

The answer is: not. By the year 2000--which is, you know, the day after tomorrow--we will be something like 15 percent above 1990.

And we're supposed to be?

We're supposed to be at 1990. The original commitment that was made--

Aren't we [supposed to] be 7 percent below 1990?

There's a budget period two. The average over the period, 2008 to 2012, we're supposed to be 7 percent below. Right now, I forget the number for 1999. But for the year 2000, the forecast something like 15 to 16 percent above 1990. By the 2008 to 2012 period, we'll be something like 25 percent above 1990 if we follow the path that we're on. So you take the 25 percent above 1990, add the 7 percent that we're supposed to be below 1990, and you've got something over 30 percent, near a third, that would have to be cut.

So we're not doing too well.

Now, what happened...the reason I say "not" is that in the original Rio treaty, there was a very loose commitment to return to 1990 emissions by 2000. It was not a firm legal commitment, but it was a statement that nations would try to do that. And Europe and Japan...a lot of other areas signed that. The Bush Administration refused to. When President Clinton came in, on the first Earth Day, he committed to that target, in 1993. And there was a plan to do this--without any teeth, but there was a plan to do this. And it had... I don't say it had no effect, but it had very small effect on lowering the rate of growth of greenhouse emissions. So we're substantially above now, and continuing to grow. So we really have very little, in effect, now. It's not that we're doing nothing. We're doing some research. There are some voluntary programs that have had some effect. But having an effect is not the same as lowering emissions by a third.

Why, in simple terms, are we so high, and a country like Russia or Ukraine are well in compliance? What's going on there?

Well, we're high because we're rich. And we're high because, in relation to some other countries, we have had a design of our tax system. In general in this country, we've taxed income; we've taxed property. We have not taxed fuel as a major element of our tax system. Others countries have different tax systems, so they've had higher fuel prices because the tax system used fuel, not for environmental reasons, but for fiscal policy reasons.

Russia is less for two reasons. First of all, Russia is a poor country. Russia was a relatively poor country in 1985. but then you have not only the collapse of the Berlin Wall but the collapse of the economies of places like the Russia and Ukraine. So you actually have falling real gross domestic product in those countries. So that they are way below their 1990 level of emissions, just because people are too poor to drive around, or a lot of inefficient industries have shut down. So that's one way to cure the greenhouse problem. But I hope we don't have to go through that kind of process.

Given that we're not really on the track to meet Kyoto, what are the chances of it being ratified, in your view?

Not good. I think that there is substantial support for ratification in Europe, so we have to talk about different countries. I mean, I think that many countries will ratify Kyoto. The treaty does not go into effect until a certain fraction of all the countries ratify it. And the way that number has been set, the treaty doesn't go in effect until the United States ratifies it. So the key is, will the United States ratify it, which I take to be the origin of your question.


First of all, I want to say that it's difficult to predict politically. It's difficult to [predict] politics of the country, so you don't know what's going to happen. But certainly, I don't know anybody who believes that it would even be suggested to the Senate that they consider this until after the election in the year 2000. Now, would it be ratified then? My guess is that the answer is: probably not. Even if you had a sympathetic Senate, it would not be ratified as it stands, because the Kyoto Protocol--which is what we're talking about--has a commitment of this drastic reduction, now, of emissions in the United States. Now, suppose it was submitted to the Senate. Most optimistic scenario: Submitted to the Senate, let's say, in 2001. It takes them a couple years to deal with it. Then it's 2002, 2003. By the time you're in [2003], you're so close to the deadline that you can't imagine turning the economy around in a short period of time. It's too late. Even though there might be a strong sympathy --which is questionable, of course; that's a political question which we don't know--in the Congress for ratifying it, it's really too late to ratify if you seriously mean to achieve it. So I think we're more likely headed for a renegotiation of it.

It's probably dead.

I think "dead" is not quite the right word. It doesn't die. A lot of nations have a lot of stake in this treaty, and lot's been put into it. So maybe not dead, but it certainly is going to have to be resuscitated in a modified form. Because by the time we get to this point, it's too late. [There] is not enough time to do the investment to turn around the capital stock. It's not believable if you wait until 2003, 2004 to start this.

Kyoto really makes very little difference to the problem, in terms of atmospheric concentrations of carbon. If you really want to turn those around and prevent the doubling, tripling, quadrupling, you have to reduce radically the carbonization of the energy sources of the entire world, don't you? And that's a very huge problem, isn't it?

Yes. Kyoto is a small step. I mean, it's not insignificant, but by our calculations, if you take a forecast to the year 2100 of the temperature change, let's say, this would reduce the expected warming by about 17 percent. So it's not big. But you have to start somewhere. And so Kyoto may or may not be the right level. Most people feel like Kyoto is too strong a turnaround in the short run. But it's not really fair, I think, to say that Kyoto doesn't solve the problem. Of course Kyoto doesn't solve the problem. Kyoto is a step which might begin to change a bit the trajectory that we're on. Solving the problem is going to require things that are not in Kyoto, that are not part of that agreement. Perhaps they should be, but they're not.

For example, forms of agreement that will bring serious discussion of extending this commitment, if the developed countries make it, and extending it gradually to the developing countries as they get more wealthy. And my own view is, if this turns out to be a really serious problem, we have to stabilize the atmosphere. There is no hope of doing it without substantial technological change.

So Kyoto is really a first step. It's really not fair to say it doesn't solve the problem. Even the people who are in favor of it don't think it solves the problem.

Right. Do you think they really grasp the nature of what's involved, when you talk about technology, that new technologies will need to be there at some stage?

I think largely that the way it's covered in the press doesn't make clear that whatever we do first, if it's Kyoto or something less than Kyoto, is only a step on a path that may require much more stringent things...make much more stringent things later.

But worse than that, I don't think that a lot of the public discussion is clear about the fact that it's going to be costly, and it's going to require changes in the nature of taxation and/or regulation in the United States.

So a lot of the public presentation of this by, I think, by the Administration, certainly by advocates, makes it sound like that we can do this with conservation. It'll all be easy. And I think that's misleading. I think it would be much more useful for people to understand that this is potentially a serious problem, and we have to be ready to deal with potentially disruptive policies to deal with it.

Now, we don't have to take those policies now, but we need to do something now. We will revisit this over time, because a lot of the uncertainty that we have now, people expect, will over the period of decades--two or three decades--gradually be resolved. We're not making the whole decision now about what to do about climate change. We're only deciding the first step now.

Is this a problem that technology ultimately gets us out of? Or do we have to change how we live?

Well, ultimately both. That is, if this turns out to be a really serious problem, and there is a serious commitment to stabilize the atmosphere, to not let the carbon dioxide continue to increase, then that's going to require both. It's going to require some change in the way people live. Now, to say the change in the standard of life sounds like that we become poor, no, no. We don't become poor again. But we may drive smaller vehicles. We may buy more efficient devices. We may have different types of lighting.

Now, if we get to really serious reductions, as might be required, like cutting the amount of energy per unit of gross domestic product by a factor of what we are now, cutting it in half, or cutting it by two-thirds, my own view is that unless we develop technologies that are competitive with fossil fuels, that don't put the carbon in the air, we can't do it. So my own personal view of this is that getting the political commitment, getting the international agreements, working out the policies to do this, is going to be very, very difficult. And it's really only going to be possible--if it turns out we need to do it--with dramatic technical change. So that I think that's really the only hope in the long run.

If you had to put your bet on areas where you should be investing now technologically, where would they be?

First of all, we have a lot of fossil fuels in the world, lots. There's lots of gas and lots of oil, certainly for centuries. And there's lots of coal for multiple centuries. And there's a lot of what people call nonconventional oil. So we're going to use it. My first and highest priority is the development of ways to use that fossil fuel but not release the CO2.

So sequestration.

That's sequestration. That can be done by various kind of chemical processes where you just remove the hydrogen and put the carbon away, and use the hydrogen as a fuel. It's possible to burn coal in a power plant, and we remove sulfur from the stack gases. We can also remove carbon dioxide from the stack gases. It's expensive, but we could do it. So I think that's my first one.

I also think that, in the long term, a high priority--and one that's now not being followed in the United States--is to find a socially acceptable version of nuclear power. I think one of the great tragedies of current R&'s not a tragedy necessarily that we're not building more nuclear power, because there are a lot of social reasons to worry about nuclear power. The problem is, we're not doing the research that would be needed to search for a nuclear power option that would be socially acceptable. So those are my two top options.

Now, one of the things to say about this, about energy, is that there's no silver bullet. There's no single solution. There's no single technology. There are a thousand technologies. So, then you have to look for a lot of high-payoff smaller things: in appliances, in transportation, in lighting, in industrial processes.

Last question: When people are skeptical about this issue and say, "Don't bother me. This isn't going to happen in my lifetime," and so forth, how do you make a connection with them? Why should they care about this?

Well, there are two, I think, at least a couple of things. There is a feeling that I have, and I think a lot of people share, that you do care about your children and your grandchildren. I mean, I don't have grandchildren, but I might soon have grandchildren. And this is in their lifetime. It is distant, and for that reason, difficult. But it's not so distant. I mean, if I have a grandchild today, my grandchild born today will not be as old as I am until 2062. It's not that far away, in in terms of generations of people that are around. You can care about this issue because of people you know. That's one point.

Another is a more distant, kind of vague, and goes back to a point we made earlier about a kind of a reservoir of moral energy here. There is a sense of not messing up the world--more responsibility for stewardship for things--which is also, I think, people's motivation for caring about this issue..

Do you think we'll solve this problem?

I wouldn't bet we can solve it. I think it is extremely, extremely difficult, and also because of all the political difficulties of dealing with it. I think that with the right technological breakthroughs we might be able to solve it.

My point is that though I don't know whether we can solve it or not, it's very important to work on it. It's worth our effort to really work hard to try to find a ways to solve it. Whether we can, I'm not sure.

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