Redefining Climate Legislation | An interview with Fred Krupp » bio
A: “What I’ve appreciated in Washington is that companies like Duke can be a powerful voice for change, and Jim Rogers’ participation in the U.S. Climate Action Partnership and support of its Blueprint for strong legislation, have helped open the eyes of legislators to the urgent need for action.”
This is a long version of the interview.
DUKE ENERGY: How do you view Duke Energy in terms of the way it is trying to redefine its boundaries to address climate change?
FRED KRUPP: I appreciate Duke taking a constructive role in searching for answers and solutions on national climate policy. We know we’re going to disagree on some things, but the idea that here’s a company that’s willing to join the voices of leadership on this issue and say, “Yes, this is how we can do it,” instead of the more typical, “No, let’s stand pat,” is very much appreciated.
DE: What should be the role of companies like Duke Energy in meeting the climate challenge?
FK: As one of the nation’s largest emitters of greenhouse gases, Duke Energy has an obligation to be engaged in finding and implementing solutions to the problem. The decisions you make every day about what plants to run and what plants to build are decisions that will have implications for generations.
What I’ve appreciated in Washington is that companies like Duke can be a powerful voice for change, and Jim Rogers’ participation in the U.S. Climate Action Partnership and support of its Blueprint for strong legislation, have helped open the eyes of legislators to the urgent need for action.
DE: In your opinion, what are the minimum requirements for federal climate legislation?
FK: Any climate legislation needs to be a cap-and-trade program that starts with a mandatory declining cap that gets us 20 percent reductions in the nation’s emissions by 2020, 42 percent reductions by 2030 and 80 percent by 2050.
DE: How should such legislation protect consumers, especially those in the two dozen or so states whose electricity is primarily generated from burning coal?
FK: It’s important in the transition to a low-carbon economy that we treat all consumers, including consumers in states that are now heavily dependent on coal, in an equitable way to ease the transition.
DE: How can we better educate consumers about how such a market-based system would work?
FK: Any solution starts with firm limits on global warming pollution. A market solution implements these legal limits in a way that rewards innovators so we create jobs, protects the public at the lowest cost, and has real regulation of the market that achieves healthy air. That’s essential – we need strong market oversight to prevent manipulation and ensure we achieve the environmental goal.
On the Environmental Defense Fund Web site, we explain how a market-based solution like cap-and-trade works. We also include a major success story by showing how cap-and-trade achieved 100 percent compliance in reducing sulfur dioxide emissions in the 1990s. This market-based approach demonstrates that environmental protection need not compete with economic well-being – done right, it can drive innovation and economic growth.
DE: How should such legislation address fossil fuels and energy efficiency?
FK: Fossil fuels are a significant piece of our economy and are likely to be for the foreseeable future, but that fact can’t be used as an excuse for continuing with business as usual. The fact is, fossil fuel dependency has serious consequences for the environment and for our economy. It’s left us more dependent on regimes that are hostile to our country, and so we have to free ourselves of this dependence and develop many alternatives for more than one reason.
In the near term, there’s a lot to be gained from investing in energy efficiency, as the cleanest power plant is the one we don’t have to build. I’ve heard Jim Rogers refer to energy efficiency as the “fifth fuel” after coal, natural gas, nuclear and renewables. I call it the “first fuel.” The reason a national cap on carbon emissions is so important is that it drives energy efficiency and the deployment of low-carbon solutions beyond efficiency that are becoming increasingly cost-effective.
DE: What about the technology options of carbon capture and storage (CCS)?
FK: One of the reasons that I believe those who care about the environment should be supporting CCS is because to the extent we can find technologies to make it viable for the existing fleet, we raise our ability to lower carbon emissions in our nation much faster than if we don’t. If we can retrofit our existing fleet, it’s just a big advantage to what’s possible in terms of reducing our nation’s greenhouse gas emissions.
I believe that we’ve got to drive emissions down so rapidly that we really have to develop CCS and make it viable. It’s going to take work by EPA to set up the right regulations to make sure the carbon we capture stays sequestered. It’s going to take actually sequestering carbon, as Duke is hoping to do with its integrated gasification combined cycle (IGCC) power plant project in Indiana. And, it’s going to take the driver of a cap to get it deployed broadly.
DE: What about nuclear energy to address greenhouse gas emissions?
FK: In terms of nuclear energy, the fact that climate change is so severe means that we can’t afford to rule out any lower carbon source of energy, including nuclear. But before we consider expanding the use of nuclear power, we need to solve the real problems of waste disposal, security and cost.
DE: Do you think we’ll have climate legislation in time for the Copenhagen Climate Conference this December, or is 2010 more likely?
FK: I think we’ve got a good chance to get legislation in 2009. The big new factor is we now have a President who not only believes we need climate legislation for the sake of the climate, but he understands we need climate legislation for the sake of the economy. That makes me believe it could get done this year, but it will take much hard work to make it happen.
DE: How do we translate that leadership to the developing countries, notably China and India, to get them sort of on a similar path if not the same path?
FK: It’s going to take some good negotiators and some tough negotiations. There’s going to be no substitute for diplomacy. The adoption of a mandatory climate policy in the United States is going to be essential for getting the developing countries to come to the table with their own plans.
How the United States’ cap-and-trade legislation links with other countries and what incentives we create for other countries to tackle issues like deforestation is going to be a critical component of the domestic legislation. I believe there are ways to write the legislation that creates real incentives for them to come to the table, including restricting access for the other countries to sell credits into the United States if they don’t adopt a mandatory cap.
DE: Do you envision, at some point, a worldwide carbon price and a worldwide cap-and-trade market?
FK: Yes, at least for the principal emitting nations. But I think it’s going to be up to each individual country to decide how to meet their carbon reduction obligations. There will be some countries that don’t want to join the market. As long as they’re meeting their treaty obligations, that will be fine.
I suspect, ultimately, we’ll get to a system where countries that make reductions that are monitored, verified and inspected and audited, will be able to sell their tons of carbon dioxide into a carbon market for a higher price, and claimed reductions that don’t have strong oversight and verification will be excluded.
DE: What about the science in the climate change debate? Are we being aggressive enough in our efforts to address this issue?
FK: Unfortunately, global warming is a problem that’s going to have to be solved by global action, so the United States can't do it alone. It’s going to take an agreement among many nations to get the reductions we need.
I don’t believe that the first legislation we get on this subject will be the last legislation. My aspiration for legislation is that it will set up a system that proves we can get carbon emissions reductions at lower prices than generally believed. Then, as the science evolves and, I fear, gets even more urgent, and as the evidence grows that we can generate reductions at low cost, I anticipate that Congress will commit to deeper reductions. But that will come after Congress talks with a lot of stakeholders, including Duke Energy, the scientific community and others.
Environmental Defense Fund
New York, N.Y.
Fred Krupp is widely recognized as the foremost champion of harnessing market forces for environmental ends. This approach has become the leading model for solving global warming. In his 24 years as head of EDF, Krupp has overseen EDF’s growth from a small nonprofit into a recognized worldwide leader in the environmental movement.