DCM Shub speech at the BBH Conference

We’ve also welcomed the unprecedented levels of support for a good Paris outcome by key actors from businesses, sub-national governments, the faith community, and many others in civil society.  Earlier this year, the White House launched the American Business Act on Climate pledge, voicing their support for a strong outcome at Paris – and also announcing significant pledges to reduce their emissions, increase low-carbon investments, and take other actions to build more sustainable businesses and tackle climate change.  To date, more than 80 companies have joined this initiative – companies that have operations in all 50 states, employ over 9 million people, represent more than $3 trillion in annual revenue, and have a combined market capitalization of over $5 trillion.

Local and state or provincial governments have been especially active, as the ones who can take concrete steps such as improving public transit networks or planning pedestrian-friendly communities.  And they are also the frontline defense against climate change’s worst effects.  That is why I am happy to report that Vice President Biden announced just days ago that 83 U.S. cities have committed to the Compact of Mayors – leaving just 17 cities to go to fulfill the White House challenge for 100 U.S. cities to commit to the Compact before the start of the COP21.

And, at the National level, we support a Paris outcome including a long-term goal for deep decarbonization over the course of this century in order to keep earth’s temperatures from climbing higher than two degrees Celsius.

We think it is important that the Paris outcome include a five-part package with regard to mitigation.

– First, we need strongest possible INDCs from as many countries as possible. In order to reach an ambitious agreement in Paris, we need the support of all countries to tackle this global challenge. We are greatly encouraged that over 150 countries representing nearly 90 percent of global emissions have submitted intended nationally-determined contributions. We’ve never seen that kind of broad participation.

– Second, we need the agreement to build in the notion of successive rounds to ratchet ambition up over time, in light of periodic aggregate stocktaking of where we all stand – every five years.

– Third, countries should be urged to develop notional strategies – what we might call white papers – for the kinds of deeper reductions they hope to make by mid-century.

– Fourth, the agreement should include a long-term goal for deep decarbonization, or the like, during the course of the century.

– Fifth, the Paris outcome should include a broad expression of commitment and activism by non-state actors such as state and local governments, the private sector and civil society, plus the promise of collaborative action among interested governments.

COP 21 has the potential to be a landmark moment for climate efforts, but it will not be the last word.  The global economy—as well as individual countries’ economies—are shifting more rapidly than ever thanks to new energy sources and generation technologies, to electric vehicles and smart grid technologies, and to other trends.

 

To help guide future efforts, we encourage countries to develop notional strategies for the kinds of deeper reductions they hope to make in future decades through to mid-century.

As I said, the United States is committed to reduce emissions by 26 to 28 percent below 2005 levels by 2025.  We are now backing up that pledge with new policies that will achieve that goal.

I would like to highlight that in August President Obama announced the Clean Power Plan, which establishes for the first time ever carbon emissions standards forU.S. power plants, which account for 40 percent of the U.S. total.  The new rule will lower power sector emissions by an estimated 32 percent below 2005 levels by 2030.

The plan establishes state-by-state targets for carbon emissions reductions and offers a flexible framework for states to comply. Each state has a specific target based on its current portfolio of electricity generation.

Put simply, the Clean Power Plan puts states in the driver’s seat to choose the path that works best for them. Utilities can improve efficiency, run cleaner power plants, shift toward cleaner fuels, or use renewables. States can take those reductions all the way to the plug through energy efficiency and trading programs within their state, or with other states.

The plan varies because each of the fifty states has its own advantages and limitations.  For example, Washington State, with its great rivers and famous rainfall, produces 30 percent of U.S. hydroelectric power.  In other states, solar power offers greater promise.

States also have the option to form regional compacts to share and lower costs, including through emissions trading programs.

A great example of this is the Northeast Regional Greenhouse Gas Initiative, the first market-based regulatory program to reduce greenhouse gas emissions in the U.S.  Its nine states, from Maryland to Maine, capped carbon emissions from the power sector at 91 million tons in 2014.

The cap will decline by 2.5 percent each year from 2015 to 2020.  The states sell nearly all emissions allowances through auctions and, like the European Union’s NER 300 program, invest proceeds in energy efficiency and renewable energy.

The states are to submit final plans to the U.S. Environmental Protection Agency by early September, 2016.

I would also like to highlight the United States’ work on reducing emissions from cars and trucks. Already, the U.S. Environmental Protection Agency has established standards for light-duty vehicles that will double how far a car can travel on a liter of gas by 2025 and established first-ever standards for medium- and heavy-duty vehicles like buses or freight trucks.  Medium- and heavy-duty vehicles account for about twenty percent of emissions from the U.S. transportation sector, but make up only five percent of vehicles on the road.  Emissions from heavy-duty vehicles alone are on track to surpass those from cars by 2030.

 

Recognizing the need to do more, this summer, the Environmental Protection Agency and the National Highway Safety Administration have jointly proposed standards for improved fuel efficiency that by 2027 will lower fuel consumption and carbon emissions from heavy-duty on-road vehicles by 24 percent; from off-road, or construction, vehicles 16 percent; and from medium-duty vehicles by 16 percent.

Over the lifetime of the vehicles, this will save 75 billion gallons of fuel and one billion metric tons of carbon emissions—the equivalent of the power consumption of all U.S. homes in a year.

The U.S. Departments of Transportation and Department of Energy as well as private industry, have also invested millions of dollars into researching ways to reduce medium- and heavy-duty vehicles’ fuel consumption through improved aerodynamics, rolling resistance, and lubrication.

Travel on an American interstate highway these days and you will quickly notice freight trucks with cowls closing the gap between the tractor and trailer, aerodynamic skirts below the trailer, or rounded so-called “boat-tails” on the end.  So the United States is enacting new standards, with the means to achieve them.

And the private sector has been supportive because better fuel economy means reduced costs in an industry with razor thin operating margins.  Many of these features are inexpensive and have obvious utility for other parts of the world.

In our efforts to reduce harmful emissions in the transportation sector, the U.S. is also working on promoting the electrification of transportation. On that issue, I would like to take the opportunity to highlight how the United States is collaborating closely with the European Union to develop new technology standards and practices under the auspices of the Transatlantic Economic Council and U.S.-EU Energy Council.

Just two weeks ago, the European Commission’s Joint Research Centre hosted Ambassador Gardner and several senior Department of Energy officials in Ispra, Italy for the inauguration of the Electric Vehicle and Smart Grid Interoperability Center.  JRC’s facility has a twin, inaugurated in 2013, at the Department of Energy’s Argonne National Laboratory near Chicago.

Together JRC and DOE, with private industry and international standards bodies, are developing technologies, standards, and practices to ensure a smooth and broad expansion of our electric vehicle fleets.

To return to my earlier metaphor, the United States takes very seriously our responsibility to bring to Paris not just our political will, but also our homework—its transparent and thorough plans for how our country will make good on our commitments, and how we can work with others to do the same.

I look forward to success in Paris.  Thank you to BBH for hosting today’s conference.