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POWERFUL PARTNERSHIPS: THE ROLE OF INTERNATIONAL COOPERATION IN ADDRESSING GLOBAL ENERGY CHALLENGES John P. Holdren Teresa & John Heinz Professor of Environmental Policy Director, Program on Science, Technology, & Public Policy HARVARD UNIVERSITY and Chair, Panel on International Cooperation on Energy President's Committee of Advisors on Science & Technology EXECUTIVE OFFICE OF THE PRESIDENT OF THE UNITED STATES CONFERENCE ON CLEAN ENERGY PARTNERSHIPS: DEVELOPING GLOBAL SOLUTIONS Seattle, Washington 14-16 November 1999 The connections among energy, environment, and development are direct and profound. Development should be thought of as the process of improving the human condition in all its aspects, not only economic but also environmental, political, social, cultural... Sustainable development should mean doing so by means and to end points that are consistent with maintaining the improved conditions indefinitely. Energy in convenient and affordable forms is an indispensable ingredient of economic progress. But energy is also the primary cause of many of the world's most damaging and intractable environmental problems. Providing energy in the forms and quantities needed to meet economic aspirations while avoiding intolerable degrees of environmental disruption is the core of the sustainable development challenge. WORLD AND U.S. ENERGY SUPPLY IN 1997 WORLD USA PRIMARY ENERGY (1018 joules) 440 100 of which... OIL 35% 38% NATURAL GAS 20% 26% COAL 24% 23% NUCLEAR ENERGY 6% 8% HYDROPOWER 2% 1% BIOMASS & OTHER 13% 4% ELECTRICITY (billion kWh) 13200 3500 of which... FOSSIL FUELS 63% 70% NUCLEAR ENERGY 17% 18% HYDROPOWER 19% 10% BIOMASS & OTHER 1% 2% WORLD ENERGY & ECONOMY BY INCOME CLASS, 1995 TRANSI- POOR TION RICH _____ _____ _____ POPULATION, billions 3.8 1.1 0.8 GDP, trillion $ (ppp-corrected) 8 7.5 17.8 INDUSTRIAL ENERGY, terawatts 2.5 3.1 6.1 BIOMASS ENERGY, terawatts 1.4 0.3 0.1 FOSSIL CARBON, GtC/yr 1.5 1.5 3.0 per person GDP, thousand $ 2.1 6.8 22.3 TOTAL ENERGY, kilowatts 1.0 3.1 7.9 FOSSIL CARBON, tC/yr 0.39 1.36 3.75 [poor = <$4k/pers-yr, transition = $4k-16k, rich = >$16k] THE "BUSINESS AS USUAL" ENERGY FUTURE 1990 2050 2100 Population, 109 Industrial countries 1.2 1.4 1.4 Developing countries 4.1 9.2 10.6 GDP/person, 103 1990$ Industrial countries 15 36 60 Developing countries 2 10 30 Energy/person, kW Industrial countries 7.1 9.3 9.4 Developing countries 0.9 2.6 4.7 GWP, 1012 1990$ 27 145 406 World energy, TW 12.5 37.2 63.1 Fossil carbon, GtC/yr 5.8 15.2 23.4 THE ESSENCE OF THE ENERGY PROBLEM THE WORLD IS NOT RUNNING OUT OF ENERGY BUT IT IS RUNNING OUT OF... CHEAP OIL ENVIRONMENT TOLERANCE FOR INEQUITY MONEY FOR BETTER OPTIONS TIME FOR A SMOOTH TRANSITION LEADERSHIP TO DO WHAT IS REQUIRED THE MOST SERIOUS ENVIRONMENTAL PROBLEMS LOCAL BUT PERVASIVE C bacterial contamination of surface water C indoor air pollution by smoke from coal & biomass C toxic pollution of soil and groundwater REGIONAL C outdoor air pollution: PM-10, HC, NOx, SOx C acid precipitation C soil erosion and degradation GLOBAL C biodiversity loss C stratospheric ozone depletion C greenhouse-gas-induced climate change CLIMATE CHANGE IS THE MOST DANGEROUS AND INTRACTABLE ENVIRONMENTAL PROBLEM IT IS THE MOST DANGEROUS BECAUSE IT PROFOUNDLY INFLUENCES ALL ENVIRON-MENTAL CONDITIONS AND PROCESSES AND ALL ASPECTS OF HUMAN WELL-BEING. IT IS THE MOST INTRACTABLE BECAUSE IT IS DEEPLY ROOTED IN CHARACTERISTICS OF THE WORLD ENERGY SUPPLY SYSTEM THAT CAN BE CHANGED ONLY SLOWLY AND WITH GREAT DIFFICULTY. "The Kyoto Protocol to the Framework Convention on Climate Change is a strong first step toward meeting the climate challenge. But if the judgment of the IPCC and the great majority of climate scientists about the probable course and consequences of anthropogenic climate change proves correct, as we in PCAST think likely, then meeting the emissions limits set in Kyoto is only a down payment on the changes required over the long run." from a May 15, 1998 letter to President Clinton from the President's Committee of Advisors on Science and Technology (PCAST) President's Committee of Advisors on Science and Technology PANEL ON THE FEDERAL ROLE IN INTERNATIONAL COOPERATION ON ENERGY INNOVATION John P. Holdren, Professor of Environmental Policy, Harvard University (Chair) Richard Balzhiser, President Emeritus, Electric Power Research Institute John Boright, Exec Director, Offc of International Affairs, National Research Council Bill Chandler, Director, Advanced International Studies, Battelle Laboratory John Deutch, Institute Professor of Chemistry, MIT Howard Geller, Exec Director, American Council for an Energy-Efficient Economy John H. Gibbons, former Science & Technology Advisor to the President Larry Papay, Senior Vice President for Research, Bechtel Corporation Nathan Rosenberg, Professor of Economics, Stanford University Maxine Savitz, General Manager, Allied Signal Ceramic Components Bruce Stram, Vice President for Business Development, Enron Energy Services Bob Williams, Sr Scientist, Energy & Environmental Studies, Princeton University Lilian Shiao-yen Wu, Research Scientist, IBM Corporation John Young, PCAST Co-Chair and former CEO, Hewlett-Packard Corp Sam Baldwin, Study Executive Director, OSTP Paul de Sa, Assistant to the Chair, Harvard University Ann Kinzig, OSTP Staff Martin Offutt, OSTP Staff PCAST INTERNATIONAL ENERGY PANEL THE FEDERAL ROLE IN INTERNATIONAL COOPERATION ON ENERGY INNOVATION 1. U.S. interests and government roles in international cooperation on energy research, development, demonstration, and deployment (ERD3): rationales and roles for US participation in international cooperation on ERD3 in light of U.S. interests and values; specific benefits of high-innovation vs. low-innovation futures. 2. The international landscape of ERD3: current picture and recent trends in domestic & international ERD3 efforts by governments, firms, NGOs, and multilateral organizations; inadequacy of existing efforts. 3. Foundations of international cooperation on energy innovation: analysis and recommendations concerning capacity building for ERD3 in the United States, partner countries, and multinational institutions; cooperation in energy-sector reform to attract private capital while preserving public benefits; facilitating financing of innovative energy technologies. 4. Opportunities for cooperation on efficient end-use technologies: high-leverage initiatives to increase efficiency in buildings, energy-intensive industries, and vehicles, as well as with combined heat and power. 5. Opportunities for cooperation on energy-supply technologies: high-leverage initiatives to accelerate RD3 of biomass and other renewables, as well as fossil-fuel decarbonization and sequestration; cooperative research to address problems of fission, develop fusion. 6. Portfolio assessment, partnering, and program management: criteria for assessing the cooperative ERD3 portfolio; considerations in forming partnerships; mechanisms and institutions for management, coordination, & evaluation of Federal cooperative ERD3 efforts. BENEFITS FROM ENERGY TECHNOLOGY IMPROVE-MENTS IN ONE'S OWN COUNTRY lower cost & improved reliability of energy services reduced need for energy imports reduced local & regional environmental impacts of energy reduced risks from domestic nuclear-energy operations BENEFITS FROM ENERGY-TECHNOLOGY IMPROVE-MENTS IN ALL COUNTRIES reduced world oil prices and vulnerability reduced transboundary pollution & greenhouse gases reduced transboundary nuclear risks economic & security benefits of sustainable development CORRESPONDING INCENTIVES FOR COOPERATION increase the pace & reduce the cost of energy-technology innovation for application in one's own country address the global dimensions of energy challenges by accelerated development & deployment of innovations worldwide FOUNDATIONS OF ENERGY-TECHNOLOGY INNOVATION AND RELATED COOPERATION CAPACITY BUILDING support for existing & new regional centers for ERD3 enhanced training for energy analysts & managers ENERGY-SECTOR REFORM technical & policy advice to help get prices right while protecting public benefits (including Public Benefit Funds) assistance in regulatory frameworks for natural gas DEMONSTRATION & COST-BUY-DOWN MECHANISMS establishment of Demonstration Support Facility in GEF establishment of Clean Energy Technology Obligation energy-production tax credits for foreign demonstrations FINANCING transition to clean-energy focus in MDBs OPIC financing of energy efficiency & renewables projects COOPERATION ON TECHNOLOGIES FOR EFFICIENT ENERGY END-USE BUILDINGS assistance with standards, ratings, labeling, testing for equipment & appliances assistance with building design tools, codes, standards GEF/MDB support for building-efficiency improvements VEHICLES RD3 on hybrid, fuel-cell, electric, & alternate-fuel propulsion for buses & small vehicles assistance with vehicle emissions testing/standards INDUSTRY partnerships to reduce energy-intensity of major energy-using industrial processes by 40% over 20 years COMBINED HEAT & POWER cooperation in information, training, assessment, demonstrations, & policy reform so CHP provides 20% of new generating capacity over the next few decades COOPERATION ON TECHNOLOGIES FOR ENERGY SUPPLY RENEWABLES industrial-scale biomass with co-products; degraded land integrated renewable/hybrid systems for rural areas grid-connected intermittent renewable/hybrid systems regional renewable-energy-resource assessments FOSSIL-FUEL DECARBONIZATION/ SEQUESTRATION energy-sector & environmental reforms to encourage clean products from syngas RD3 on hydrogen from fossil feedstocks with C capture cooperation on standards, assessments, & demonstration of C sequestration NUCLEAR international component of the Nuclear Energy Research Initiative cooperative studies on managing spent fuel & HLW new international agreements on fusion-energy R&D IMPROVED MANAGEMENT OF GOVERNMENT'S ACTIVITIES IN ERD3 COOPERATION INTERAGENCY WORKING GROUP interagency secretariat in NSTC; external advisory board overarching vision, portfolio assessment, coordination assistance to agencies on monitoring & evaluation WITHIN-AGENCY PROGRAM MANAGEMENT competitive solicitations stressing well-developed business plans for moving through RD3 pipeline accountable management chains for internat'l RD3 strengthening staff through training & targeted hiring STRATEGIC ENERGY COOPERATION FUND $250 million above FY1997 level for FY2001, increasing to $500 million in FY2005 multi-year commitments to maintain continuity We should act expeditiously on PCAST's recommendations for strengthening capacities for energy technology innovation, promoting technologies to limit energy demand and for a cleaner energy supply, and improving the management of the Federal international energy research and development portfolio. As a first step, I direct you to form a working group on international energy research, development, demonstration, and deployment under the National Science and Technology Council, as recommended by PCAST. The working group should build on the PCAST report and assess the portfolio of programs underway in the Federal agencies and develop a strategic vision, including budget recommendations that can be considered in agency requests for FY2001. President William J.Clinton, memorandum to his Science and Technology Advisor, Neal Lane, 14 September 1999