While AGA is closely monitoring the progress of climate legislation and the upcoming Copenhagen negotiations, we have not taken a stance on timelines and specific percentage targets. The primary reason is that trying to peer into a future full of competing legislation and partisan interests is likely an exercise in futility. Rather, AGA is focused on the achievement of more practical goals, such as how to continue to help move toward a reduced carbon future. It should be noted that the residential sector, using natural gas for heating, has a carbon footprint today that is essentially the same as it was in 1970 even though the number of households using natural gas has grown from 38 million in 1970 to 65 million today.

In actionable terms, when looking at the 2020 target reduction of 17 percent below 2005 levels of greenhouse gas emissions, natural gas can continue to play a key role in achieving that near-term goal. And on that point, the Business Council for Sustainable Energy (BCSE) agrees that maximizing the immediate use of natural gas, along with existing clean technologies of renewable energy and energy efficiency, is the most effective way to realistically reach these targets.

BCSE’s strategic vision establishes that in a near-term scenario leading to 2020, renewables, being zero- or low-carbon emission energy sources, can address incremental new energy demand to supplement existing energy supply. Meanwhile, increases in energy efficiency, which residential and commercial natural gas customers have led the nation in achieving for nearly three decades, can contribute to reductions in overall energy consumption and greenhouse gas emissions.

With respect to this partnership approach, BCSE points out that as the lowest carbon-emitting fossil fuel, natural gas is uniquely positioned to complement the addition of renewable energy to the existing grid. Natural gas is a reliable and efficient fuel and, when used appropriately as part of a diverse energy portfolio, can be an effective substitute for more carbon-intensive energy sources.

So while the debate about timelines and targets will no doubt continue, AGA is focused on the here-and-now technologies and resources that will actually affect change for our country, our environment and for the world’s climate.

The Copenhagen negotiations will mark the first time the world's two biggest carbon polluters enter international talks with actual targets as to how much they are willing to reduce their pollution. The United States and China are now serious and ready to engage – and the work begins in earnest next week.

In the case of China, it means that we have broken through two decades of refusals to offer concrete, significant proposals for their own emissions. It’s a major blow to Senate obstructionists who say we can’t act before China does. Now China is at the negotiating table. Where are the obstructionists? Will they now compromise as well, or was their China talk just bluster? The US-China breakthrough has left the “just say no” crowd with one less excuse for preserving America’s expensive, polluting energy status quo.

Thanks to the House’s passage of the American Clean Energy & Security Act and the EPA's actions to regulate carbon pollution, President Obama will sit down at the climate negotiating table in Copenhagen holding some cards to play. And as the US/China targets show, we’re closer than ever to a real path to global solutions.

Successful climate policy should leave the competitive position of U.S. manufacturers in the global marketplace unchanged. In that regard, energy-intensive, trade-exposed sectors, such as steel, need to see mechanisms provided that will offset the costs that would result if a 17 percent reduction in greenhouse gas emissions by 2020 were to be mandated. These aspects of U.S. climate policy should include:

• A sufficient and stable pool of allowances to address compliance costs arising from direct and indirect emissions;

• Provisions to offset compliance costs associated with increased energy costs. Under such a proposed cap, all forms of energy – coal, natural gas, biomass and electricity – have the potential to rise dramatically;

• An effective border adjustment provision that requires imported energy-intensive goods to bear the same climate policy-related costs as competing U.S. goods. The border measures should apply to imports from all countries that do not have in place a comparable greenhouse gas emissions reduction requirement as those adopted in the U.S.

As the US makes international emission reduction commitments and continues to develop its own climate change policies, the forest products industry and its almost one million workers urge careful consideration of the impacts these policies will have on America’s competitiveness. This is especially important in the face of the apparent reluctance of key competitor nations like China and Brazil to agree to cut their own carbon emissions in a meaningful way.

Absent a level global playing field for energy-intensive, trade-exposed manufacturers based in the US, expensive carbon policies here at home will create economic disruption and global carbon emissions leakage as manufacturing shifts to countries with no or minimal carbon regulations. Providing sufficient emission allowances to industry to cover expected increases in direct and indirect costs, flexibility, and time to reach carbon emission reduction goals is essential to both successfully reaching these goals and maintaining the economic vitality that will finance the effort.

While the forest products industry shares many of the same concerns about energy and compliance costs as other manufacturers, our foundation in a renewable and recyclable raw material—wood fiber—gives us an additional and unique point of view. Forests and the products we make from them offset 10 percent of the nation’s annual carbon emissions. Putting these offsets to work in a cap-and-trade program is essential to such a program’s success.

For example, our industry’s massive carbon-neutral, renewable energy generation—27.5 million megawatt hours annually, and the more than 20 million metric tons of CO2 equivalents in avoided emissions we help foster every year through paper recovery and recycling, are major contributions that deserve recognition. Also, in accordance with internationally-accepted scientific standards, the fact of the carbon-neutrality of biomass combustion must be maintained in order to preserve biomass energy as a solution to increasing our energy security and reducing our dependence on fossil fuels.

While some dismiss the idea that almost one million jobs rooted in the harvesting and processing of trees could be considered “green jobs”, it is the demand for renewable paper, packaging and wood building products that motivates the private forest owners who control almost 60 percent of America’s forests to replant trees and keep their forests intact. In fact, there are more acres of forests in the US today than there were 100—or even 20—years ago thanks to the sustainable forest management the industry makes possible.

International agreements and US policies that recognize the role of forests and the forest products industry’s contributions to climate change solutions are more likely to succeed. The failure of climate change efforts is almost assured if valuable solutions are left on the table and if unrealistic targets and timelines lead to painful economic disruption.

Even with all of the overhype about the meetings in Copenhagen the most likely positive outcome will be a boost to the economy of Copenhagen.

A lot of behind-the-scenes effort, including consultations with members of Congress, appears to have gone into the White House’s announcement Wednesday. It appears the Administration concluded that announcing a target “in the range of 17 percent below 2005 levels in 2020” was the best it could do to navigate the Scylla and Charybdis of domestic and international politics on this issue.

The 2020 target “in the range of 17 percent” reductions might cause a little consternation, but shouldn’t. Not only is it consistent with the bill that passed the House in June, but it is also in line with a range of emission reductions recommended collectively by the members of the U.S. Climate Action Partnership, a coalition of over two dozen major U.S. companies and 5 leading environmental and conservation organizations.

While the Administration’s bid represents progress from President Obama’s campaign commitment to stabilize emissions at 1990 levels, The Nature Conservancy will continue to press the Administration to maintain the 20 percent reduction from 2005 levels in the Senate bill. The President’s earlier pledge was equivalent to a 14 percent cut, but since he first voiced that commitment in 2007, U.S. emissions have fallen substantially.

All of these numbers fall short of the 25 to 40 percent reductions from 1990 levels – that the Intergovernmental Panel on Climate Change (IPCC) estimated that developed countries would need to achieve in aggregate to stay on a path to keep atmospheric greenhouse gas concentrations below an equivalent of 450 parts per million of CO2, even with substantial developing country contributions.

These IPCC recommendations form the basis for many developing countries’ view that the U.S. and other developed countries need to increase their bids.

Navigating this complex array of pressures is not easy. The Administration has sensibly noted that the final target must be “ultimately in line with final U.S. energy and climate legislation” and signaled that the target could be adjusted based on final legislation.

Nevertheless, it may help to achieve some results. The Administration’s proposal already appears to have induced some response in China which announced a target on Thursday. India’s position is less clear. But Administration engagement on targets and timetables can help to bolster the positions of Brazil and Indonesia, which have already put strong proposals on the table.

What may be as important to some developing country negotiators is what the United States can offer in terms of a climate finance package. Consensus is growing that an interim or quick-start finance package ramping quickly up to $10 billion per year and extending until the first commitment period in the next climate agreement (perhaps 2013) would be an appropriate collective contribution by the developing countries. The United States can take two steps now to contribute to a positive outcome from Copenhagen and encourage further developing country engagement:

First, Congress should conclude its work on the FY10 Foreign Operations appropriations bill, awaiting Congressional action, perhaps as part of an omnibus appropriations bill. The U.S. is currently poised to contribute about a billion dollars in climate finance through this act. This money would go to provide much-needed capacity and assistance to developing countries, including laying the groundwork to reduce emissions from deforestation, and support some of the world’s most vulnerable populations from climate impacts. Expeditious passage of this bill serves U.S. interests in Copenhagen and the developing world, and will provide a significant benefit in boosting no-regrets efforts to limit emissions and respond to climate changes already being experienced.

The Administration could combine this with an early announcement of its commitment to propose larger sums in FY11 and perhaps FY12. A contribution in the range of $2 to 3 billion annually would be consistent with the U.S. contribution to other multi-lateral efforts. It should include funding for reducing emissions from deforestation and forest degradation of in the range of $450 to 600 million per year. This will support the urgent effort to begin building the capacity and experience in developing countries that will be needed to halve deforestation and its 15 percent of global emissions by 2020, including through mechanisms that allow U.S. companies to reduce emissions at lower cost by supporting such efforts.

President Obama’s proposal for Copenhagen of a short-term (2020) target for the United States in the range of 17 percent below 2005 levels, consistent with the House-passed Waxman-Markey legislation, will surely help – not hinder -- the work of the U.S. delegation at COP-15, although at home it may be used against the Administration by its political opponents in the House and Senate. It may induce China and India to move in the direction of more constructive proposals of their own.

As we approach the climate meetings in Copenhagen, negotiations have been focused on developing a climate policy framework for the post-2012 period, but to date, these efforts have not produced a politically, economically, and environmentally viable structure for a future climate agreement. One promising approach – which is fully consistent with the White House proposal -- is a “portfolio of domestic commitments,” an approach which could be effective, and more flexible and politically palatable that other international arrangements.

Under such a scheme, nations would agree to honor commitments to greenhouse gas emission reductions laid out in their own domestic laws and regulations. A portfolio of commitments might emerge from a global meeting such as the UNFCCC Conference of the Parties, or a smaller number of major economies could negotiate an agreement among themselves, and then invite other countries to join.

Rather than elaborate here, may I direct any interested readers to my blog, “An Economic View of the Environment” (http://belfercenter.ksg.harvard.edu/analysis/stavins/), where one can read my latest post, Approaching Copenhagen with a Portfolio of Domestic Commitments.

Rob Stavins

It’s good that President Obama plans to attend the global climate-change conference in Copenhagen. But the United States has to do more than just show up. We need to lead the world on emissions-reduction targets, and the targets the President is pledging to take with him are far too weak to avoid climate catastrophe. The President does not have to rely on the weak targets under debate in Congress because he already has an excellent, proven tool – the Clean Air Act – that can be deployed right away to dramatically, immediately reduce carbon pollution. We applaud President Obama’s strong language on climate change, both as a candidate and as President, and we urge him to translate that powerful language into powerful policy by using the comprehensive system of pollution control found in the Clean Air Act to negotiate an agreement that reduces greenhouse gas pollution to meet what science demands: no more than 350 parts per million. That means greenhouse gas emissions from the United States and other developed countries should be reduced by 45 percent below 1990 levels by 2020. What’s more, the President does not need the Senate to ratify any treaty out of Copenhagen (or subsequent meeting) because he already possesses ample legal authority to craft executive agreements with other countries to effectively enforce existing laws such as the Clean Air Act, Clean Water Act and National Environmental Policy Act. This approach of executive agreements is now taken with trade and investment pacts all the time. The world's people, animals, and plants are relying on courageous leadership from the President to address the greatest threat we’ve ever faced to life on Earth. Capitulation to business as usual is not a viable option.

President Obama's supporters and climate change advocates will praise him for bold leadership that will save the Copenhagen talks from failure. In reality, what he has done is join the wink-and-nod club of international hypocrisy where governments talk boldly but don't take their emission reduction programs seriously. This is a harsh indictment but a justified one.

There are two reasons for being cynical about his announcement. The first is the impracticality of the 17% emission reduction. And second is the lack of any clarity about how will it be achieved and its cost.

The White House target is in line with House and Senate legislative proposals. Reductions on the order of 17% below 2005 by 2020 involve an energy reduction equivalent to about 1 gigaton. What is required is to reduce greenhouse emissions that much in one decade? Earlier analyses have shown this is the equivalent of building over 100 nuclear power plants, 300 clean coal facilities, or doubling the miles per gallon of every car on the road. On their face, these options are implausible.

If it was possible to get permit approvals for such a major power generation efforts for either coal or nuclear, where would the capital and engineering talent come from to complete them in a decade?

New nuclear power plants can cost upwards of $4 billion each. Advocates of expanded nuclear power to meet emission reduction goals are seeking massive government subsidies -- $100 billion in loan guarantees. Even if this level of additional debt was piled on top of all the other debt being imposed on the public, would financial markets provide $300 billion or more? Additionally, is it likely that a major portion of the automobile fleet can be replaced with vehicles getting close to 40 mpg that quickly? Who would pay for the forced fleet turnover to achieve such a goal?

If the White House believes its target is realistic and consistent to returning to robust economic growth, it needs to explain in detail how it will be achieved and at what cost. Carol Browner, the White House Energy Czar, stated that the cost of the President's plan would only cost the average family about $175 a year -- which previously had been equated to the daily cost of a postage stamp. Unfortunately, that piece of rhetoric was exposed as using the type of analysis and accounting that landed Bernie Madoff in jail.

The $175 figure is for the year 2020, assuming that the economy has recovered from the economic disruption of suppressing energy use and ignoring the real cost of "free" allowances. Moreover, the "postage stamp" figure does not include compliance costs and the effects of slower economic growth. When all costs are included, the cost to the economy is $110 billion dollars -- which raises the household cost to almost $900 a year. One Treasury Department study earlier this year put the cost at $1700 a year.

The Congressional Budget Office has just released a discussion paper of the costs of reducing greenhouse gas emissions. It details all of the factors that must be taken into account in estimating these costs. Using "rosy scenario" assumptions and taking a snap shot of one year can produce a small number but it can't mask the fact that forcing the economy to ration fossil energy will be painful, will be expensive and will damage job growth. What we need today are policies that create jobs and stimulate faster economic recovery; not ones that make our economic hole deeper and further increase public cynicism.