4. EMISSIONS: Chu predicts that energy efficiency will bring the fastest reductions(06/16/2009)

Jessica Leber, E&E reporter

While all of the talk may be about getting solar, wind and clean coal off the ground, energy efficiency gains may spur the largest greenhouse gas emissions cuts over the next two decades, Energy Secretary Steven Chu said yesterday.

"In the next two decades, efficiencies are where you're going to find the fastest action," he told a meeting of the Western Governors' Association in Park City, Utah.

Chu said efficiency investments have a "huge" potential to cut global emissions, given that buildings account for 40 percent of the world's emissions and that investments that drastically cut into this percentage could pay for themselves in 10 or 15 years. The adoption of more efficient refrigerators since 1975 has already made a big dent, he noted.

Such predictions are one reason Chu is optimistic despite recounting to the governors a stream of dire observations about the climate's current state of affairs. Unexpectedly fast rates of polar ice cap melt and sea level rise observed in recent years were not included in the most recent analysis by the Intergovernmental Panel on Climate Change, he said. He also added that disintegrating Arctic permafrost could put the global climate system past its tipping point.

"This is something I think we have to think about as we are debating, 'Well, if my electricity bill goes up 5 percent, that's totally unacceptable."

Encouraging companies to make the needed up-front investments in energy efficiency is not always easy, however. Nick Bridge, counselor for global issues with the British Embassy, said that to promote efficiency, the United Kingdom has successfully used a tax -- a dreaded word in the United States.

While the United Kingdom also has a cap-and-trade system, companies must also meet separate energy efficiency targets in order to avoid paying the levy, an incentive that Bridge said many businesses have responded to.

Several administration officials addressed the panel of governors throughout the day, announcing a bevy of renewable energy and electricity grants and a memorandum of understanding to improve state wildlife data systems to better site new energy projects (E&ENews PM, June 15).
A need to broaden the benefits of cap and trade

In a discussion about climate policies, Agriculture Secretary Tom Vilsack also called for a cap-and-trade system that minimizes the costs to small family farmers. Climate legislation, he said, will generally benefit very small community farmers who earn less than $10,000 in sales a year and very large ones with more than $500,000 in sales a year.

But, in the middle, the family farmers and ranchers, whose populations have been precipitously dropping in recent years, may have the most to lose, he noted.

"This isn't just about the survival of the planet, but it's also about the survival of rural communities to take pressure off the urban centers," he said, while pledging to work with U.S. EPA to create opportunities for these farmers in a carbon offset market.

Ensuring a greater role for agriculture in markets created to reduce the cost of greenhouse gas emissions has been a major hurdle in getting farmers and farm state lawmakers to support climate change legislation in Congress.

Robert Zoellick, president of the World Bank, also highlighted the role that agriculture and forestry will need to play to reduce emissions on the global scale. Deforestation, land use and farming practices contribute to nearly half of the emissions of developing countries.

Addressing those emissions, along with climate change finance and adaptation policies, will be a key to bringing developing countries aboard a new climate agreement during upcoming negotiations in Copenhagen in December, he said.

"It's important that all of you recognize that this is going to be one of the most challenging negotiations I've ever seen internationally," he said.