January 14, 2008 Remarks by Treasury Under Secretary David H. McCormick La Jolla, Calif. - Thank you Phil for that warm introduction, and thank you to the Australian American Leadership Dialogue and the School of International Relations and Pacific Studies at UC San Diego for inviting me to speak with you today. Both the Leadership Dialogue and the School of International Relations arose over the final two decades of the 20th Century to meet the compelling need to engage the best business, scientific and, yes, even government minds, to think though the major economic issues facing the United States, Australia, and the Pacific Rim. The 2008 West Coast Leadership Dialogue is perfectly timed to fulfill this mission. The The Importance of Multilateral Engagement No one can doubt the seriousness of the dual challenges of energy-driven development and climate change. Last November's report by the United Nation's Intergovernmental Panel on Climate Change – the Fourth Assessment report – concluded, and I quote, that: (1) "warming of the climate system is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice, and rising global average sea level"; that (2) "most of the observed warming over the last 50 years is likely to have been due to the increase in greenhouse gas concentrations"; and, that (3) "global greenhouse gas emissions due to human activities have … [increased] 70% between 1970 and 2004". Climate change is a global challenge that requires global solutions, and President Bush's strategy reflects this reality. Thus, at the December meeting of the United Nations Conference on Climate Change in Bali, the In Bali, the First, to reach consensus on launching negotiations for the development of a post-2012 climate change agreement. Second, to agree on a comprehensive negotiating roadmap that would include the prospect of meaningful actions by both developed and developing countries to tackle the climate change challenge. And, third, to agree on a schedule for the negotiations, with the goal of reaching an agreement by the end of 2009. I am pleased that we and our President Bush is already taking a number of practical steps to achieve this goal. A cornerstone of this effort is the "Major Economies Process," in which the One of the critical insights fueling this process is the central role of technology in achieving what are often perceived to be the competing priorities of energy-driven economic development and environmental sustainability. Developed countries have access to state of the art technology that drives economic growth while reducing emissions that contribute to climate change and other sources of pollution. I am not referring to esoteric alternative energy technologies that are five, ten, even twenty years or more from deployment, but rather to existing commercially-available technologies that are being deployed today in the United States, Australia, Europe, and elsewhere to mitigate the environmental impact of economic growth. However, despite the viability and availability of these technologies, they are not being widely adopted in many emerging economies. The reason is simple – advanced technology is expensive. When viewing the full range of demands on fragile budgets, leaders in developing countries have to consider pressing demands such as education or health care as well as energy. There is a premium on reducing costs to the lowest-cost alternatives to stretch funds to cover as many needs as possible. At this point in their development, many believe they don't have the luxury of investing in environmental sustainability. The growing global demand for energy will require enormous investments in technology and infrastructure. The International Energy Agency, for example, estimates that some $22 trillion will be invested in energy-supply infrastructure alone between 2006 and 2030, with $10 trillion of that sum being invested in the developing world. Estimates of the incremental cost necessary to ensure that these investments are made in lower carbon infrastructure vary, but among developing nations, it could be $30 billion or more per year. That's $30 billion these countries need for technologies that are available today to fuel growth in an environmentally friendly way. To put a dent in this funding gap – and catalyze private sector investment -- President Bush has proposed the creation of an international Clean Technology Fund. The (1) Reduce emissions growth in major developing countries through the accelerated deployment of clean technologies; (2) Stimulate private sector capital by making challenging, high impact clean energy projects more attractive investments; and, (3) Encourage major emerging economies to participate in a new global climate framework and adopt environmentally-friendly policies and investments. We have already held discussions with potential donors for this fund, and we look forward to establishing it later this year. The Key to the Challenge: The widespread adoption of clean technology is one component of a durable solution to the challenge posed by climate change and energy-driven development. But the overall success of this effort hinges upon the question of how cooperation between the developed and developing world will unfold. It is no secret to any in this room that no developing country looms larger in this equation than The impact of I was able to see an example of Even some efforts to find cleaner sources of energy have had an environmental boomerang. Take the Three Gorges Dam project. The dam is a remarkable piece of engineering, standing out as the world's largest man-made source of electricity generation from renewable energy. Yet the dam has created extensive environmental problems such as water pollution and landslides, and has come at a tremendous human cost, with the displacement and relocation of over one million people. The dam demonstrates how solving one problem may result in other problems just as significant. Fostering Bilateral Cooperation between the The challenge facing The Due to the thirst for energy and natural resources in both of our countries, the United States and China have common objectives in advancing technology development and deployment, best practices regarding energy security and efficiency, and environmental stewardship. Our goal in discussions with the Chinese has been to seize this opportunity, and we have made progress. Agreements have included:
As this list demonstrates, It is in This plan provides a path for advancing technological innovation, facilitating the adoption of clean energy technology, developing technology to address climate change, and promoting the sustainability of natural resources. It will build on current efforts underway in both countries by implementing practical steps in areas such as conservation, pollution abatement, technology and R&D, and the development of sound market-oriented environmental and energy policies and regulations. Thus, with this plan, the Each of these areas holds promise. In conservation, this could lead to further progress on combating illegal logging and sharing expertise on protected lands. In pollution abatement, this could result in market-oriented policies to combat pollutants and improve We are in the process of setting up a joint U.S.-China working group, with Cabinet-level leadership, to get our ten-year plan off to a strong start. Ultimately, the success of this effort will be judged by effective environmental protection and increased energy security while ensuring continued economic growth. Conclusion When future scholars write the history of the twenty-first century, they will judge how we in the The Chinese often say that the journey of a thousand miles begins with a single step. Well, we have now taken more than a single step, although there are thousands yet to go. The time is now for leadership to ensure we reach our final destination of a clean and prosperous world.
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