The Quest: Energy, Security, and the Remaking of the Modern World

by Daniel Yergin

  At a pre-Kyoto meeting in his office in the West Wing, senior advisers had urged Gore not to go—not to spend his political capital on a ten-thousandmile trip that might end in failure. But, for Gore, this was an issue to which he was deeply committed, and he went. “I was always planning to come,” he said when he arrived in Kyoto. “It just took a while to get my staff on board.” His speech had an electric effect on the conference, assuring the delegates that the United States was deeply engaged with climate change and that they were dealing with a “serious U.S.” His appearance broke the deadlock, with the result that the United States, Europe, and Japan all ended up with roughly the same binding targets—CO2 emissions between 6 and 8 percent lower by 2008–12 compared with 1990.23

  DEVELOPING VERSUS DEVELOPED COUNTRIES

  The second big question at Kyoto reopened the debate as to whether the developing nations would also make binding commitments about reducing emissions. Their answer was a very firm no. The Berlin Mandate had, two years earlier, exempted them. And they had no intention of budging. When Eizenstat went to meet with the delegates from the developing countries, “I received,” he recalled, “about as cool a reception as I’ve ever gotten in any forum.”24

  If one looked backward at emissions, then the developing countries had a strong case. But, if one looked forward, the developing countries would be responsible for a growing share of CO2 as their economies grew. But this was still a pivotal moment in the world economy, though not quite recognized at the time. The developing world, led by China, India, and Brazil, was about to embark on a period of extraordinary economic growth. But especially during the depths of the Asian financial crisis, this was hard to envision. Ten years earlier, one would not have worried at all about emissions from developing countries, particularly from a China that was only beginning to emerge from its Maoist grip. Ten years later, it would have been impossible not to focus on those emissions.

  Yet without binding targets for developing countries, it would be very hard to turn an agreement at Kyoto into a treaty approved by the U.S. Senate. For, the previous July, the Senate had passed the Byrd-Hagel Resolution. This was not, as is sometimes said, a rejection of the treaty by the Senate, as it was passed months prior to the Kyoto conference. Rather, it was a strong shot across the bow—a declaration that the United States would not accept a treaty that did “serious harm” to the U.S. economy or that exempted developing countries, which, it was feared, would put U.S. industry at a competitive disadvantage. “We could see that China would eventually overtake the United States in greenhouse gases,” Hagel later recalled, and thus should not be exempted from binding targets. The Senate adopted the Byrd-Hagel Resolution by a 95-to-0 vote. That was pretty categoric.25

  But at Kyoto there was no give, and no reason that the developing countries would give. The closest thing to a compromise was the establishment of the “Clean Development Mechanism,” under which companies from developed countries could invest in “clean energy” projects in developing countries. But the inability to get the developing countries—whose emissions were on a fastgrowth track—into a binding system would doom the Kyoto Protocol as far as the U.S. Senate was concerned. And the United States could not accede to the treaty without Senate ratification.

  “COST, COST, AND COST”

  The third big question at Kyoto was how to implement reductions. The Europeans wanted mandates and direct intervention. They called it policies and measures, but they meant command-and-control. The United States was committed to a trading system along the lines of acid rain (although creating a trading system for about one thousand coal-fired units in the United States was much less daunting than doing the same for the world’s consumption of fossil fuels). To this, the Europeans were adamantly opposed. They were inherently more suspicious of markets. They thought emissions trading might be an academic experiment foisted off by some professors. Or even a trick. And for many of them, the notion of selling pollution credits seemed akin to immorality, just as it had to some environmental groups during the 1990 Clean Air fight. And so the Europeans denounced the very idea of selling emission rights—what they dismissed as “hot air.”

  Bolstered by the success of the SO2 program, policymakers in the Clinton administration became convinced that this was the only way to go. As Eizenstat put it, “There were three issues—cost, cost, and cost.” And the cost of mitigating climate change without a market system would be far too expensive for any economy to bear.26

  But the trading issue was proving intractable. The deadline for the conference’s conclusion was getting very close, and still there was no agreement. Everyone was exhausted, and time was just about up. In fact, it was now overtime. The ventilation system had been turned off, the translators had left, and the delegates could already hear the banging of carpenters beginning to prepare the next conference.

  The chairman asked Eizenstat and his antagonist, the chief European negotiator, Britain’s deputy prime minister John Prescott, to go with him into an adjacent green room. The conference at this point was down to the issue of emissions trading. Prescott adamantly held to the European position, insisting that trading be no more than “supplementary,” a secondary tool. Eizenstat said that the United States would not budge, and it was not bluffing.

  “It’s very simple, John,” he said. “We’re not going to sign, we are not going to do it. All of this time over 15 days will be wasted. Do you really want to go back to Europe with no agreement?”

  “Or,” he added, “we can have an historic agreement.”

  Prescott recognized that Eizenstat would not budge, and reluctantly agreed to the central role of trading. With that, the Kyoto Protocol was effectively done and negotiated, the carpenters could continue, and the follow-on conference could move into the hall.27

  And that it is how, in the little green room on the last day in Kyoto, “markets” became embedded in climate change. Ronald Coase’s theorem, and John Dales’s refining of it into a “market for pollution rights,” had become international policy. And, if one were looking for confirmation of Keynes’s theory about the impact of “scribblers” on people who had never heard of them, then Kyoto—including the deal made in the green room—was a prime example.

  HOW REALISTIC?

  The agreement at Kyoto, Bert Bolin later wrote, marked “the first steps toward actually creating a political regime for preventing a human-induced climate change.” But there was a problem with it. As Bolin added, “At the time of its adoption it was already politically unrealistic.”28

  The Kyoto Protocol would be a treaty, which meant, for the United States, that it would require 67 votes in the Senate. But then there was the Byrd-Hagel Resolution, which said that any climate agreement should maintain U.S. competitiveness and that all the major emitters should be included—including the developing world. But Kyoto did not include them. And that would be a fatal flaw for a treaty trying to make its way through the U.S. Senate. “There was no detectable effort in the administration or the Senate to put something together,” recalled one player. It never submitted the treaty for ratification.

  “I was surprised,” said Chuck Hagel, whose Senate subcommittee would have had jurisdiction. “I thought they would.”29

  But the Clinton administration could count votes.

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  ON THE GLOBAL AGENDA

  In 2005 the leaders of the G8 countries convened for their biannual summit at the venerable Gleneagles Hotel in Scotland, home to one of the world’s most-fabled golf courses. The host was British prime minister Tony Blair. In the face of considerable domestic opposition, Blair had aligned himself with George Bush in the war on terror and the Iraq invasion of March 2003. But on climate change he was in the lead, and he had put it at the top of the agenda for Gleneagles, somewhat to the consternation of the Bush administration.

  Blair was in an exultant mood; he had just learned that London had won out over Paris and Madrid for the 2012 Olympics. But on the second of the two days of
summitry, when the presidents and prime ministers assembled around the table to talk about climate change, Blair himself was absent. The day before, during a meeting with China’s president, an aide had passed Blair a note. Blair abruptly excused himself and hurried back to London. During the morning rush hour, four Islamic jihadists born in Britain, but at least three of them trained at terror camps in Pakistan, had detonated bombs in the London transport system, setting off infernos in the Underground and blowing up a red double-decker bus. The normality of the morning commute was transformed to horror—some 52 people killed and another 700 injured. The capital was in gridlock and shock, and on very high alert for the next attack.1

  Back at Gleneagles, the summit on climate, which had been Blair’s highest priority, went on, despite the absent prime minister. Aside from the leaders, one of the other few people in the room was an economist named Nicholas Stern, who had prepared a report on Africa that was going to follow the climate change dialogue. As he looked around during the discussion on climate, Stern was struck by what seemed to him the body language of the leaders in the room, which communicated skepticism and a lack of urgency and interest. Some, Stern thought, “looked distinctly bored.”2

  Yet within the next few years, climate change would rise to the top of the global agenda and rank with the economy and terrorism as one of the foremost subjects for international discussion and negotiations. New climate change policies were intended to make a profound transformation of the energy foundations that support the world economy—a transformation as far-reaching as that when civilization moved from wood to coal and then on to oil and natural gas. Indeed, so thorough a change would mean a transformation of the world economy itself.

  The general objective is to reduce CO2 emissions substantially—in some formulations by more than 80 percent over the next few decades. But climate is hardly simple to address. Indeed, it is perplexing in a world in which hydrocarbons—oil, natural gas, and coal—provide over 80 percent of today’s total energy, and overall energy demand is expected to increase by as much as 40 percent over the next two decades. In short, making any such change is more than challenging.

  THE “K” WORD

  During the 2000 U.S. presidential campaign, not much had been said about environmental issues. “The environment was not even an issue in 2000,” recalled an environmental adviser to the Bush campaign. “The interest level was zippo.” Al Gore had of course talked about Kyoto but hardly focused on it. Gore’s opponent, George W. Bush, had, as Texas governor during the 1990s, made himself the “governor of wind,” initiating the ambitious development of renewable wind power in Texas. During the 2000 campaign, he had declared that “global warming needs to be taken seriously” and had called for mandatory reductions on “four main pollutants,” of which carbon dioxide was the fourth. Though not plentiful, such comments suggested that Bush, if elected, would want to address climate.

  That was certainly the way it was interpreted after the election by two of his top appointments. In a memo to Bush in March 2001, Christine Todd Whitman, the new administrator of the Environmental Protection Agency and the former governor of New Jersey, said, “I would strongly recommend that you continue to recognize that global warming is a real, and serious issue.” She added, “We need to appear engaged and shift the discussion from the focus on the ‘K’ word”—as in Kyoto—“to action.” The new treasury secretary, Paul O’Neill, in his former position as CEO of Alcoa, had featured climate change as an issue in his annual letter to shareholders. At a cabinet meeting at the beginning of the administration, he went around the room, handing out a pamphlet he had written on dealing with climate change. Some of those in the room thought it was a little puzzling to see the secretary of treasury distributing a corporate pamphlet warning of the risks from global warming at a cabinet meeting. But O’Neill was an industrialist accustomed to speaking what was on his mind. O’Neill wrote a memo to Bush saying that the administration should get organized to prepare options “for amending or replacing the Kyoto treaty . . . with a plan that is grounded in science.”

  But that was not to be. On March 13, 2001, EPA administrator Christy Whitman went to see President Bush to urge his support for Kyoto. The reception was not what she had expected. The president said he had already made up his mind about Kyoto and then went on to tell her about the contents of a letter he was sending to a group of senators. In it, Bush declared that while the administration “takes the issue of climate change very seriously,” it was resolutely opposed to the Kyoto Protocol, and would not go forward with it, because it did not include 80 percent of the world’s population and was an “unfair and ineffective means of addressing global climate change concerns.” He also cited concerns that caps on carbon dioxide would promote a shift from coal to natural gas in electricity generation at a time when California’s energy shortage looked like a precursor to a national natural gas shortage.3

  It appeared to many as though the Bush administration had shut down on climate change. What seemed to be the attitude of the Bush administration was captured at a ceremony at the State Department in May 2001, when Secretary of State Colin Powell swore in Paula Dobriansky as Undersecretary of State. Going through her list of responsibilities, he came to climate change. At that point, he paused, and with a small, almost embarrassed grin, laughed, and jokingly put his hand over his mouth as if he had said something slightly naughty.

  TWENTY-ONE QUESTIONS

  Climate change faded in the face of the recession of 2001. Then it lost whatever salience it had with the body politic with the September 11, 2001, attacks on the World Trade Center and the Pentagon. Yet for a narrow but key segment of the public, it was not only a highly charged but also highly symbolic issue. For some, the bitterness over the outcome of the 2000 election made the Kyoto Protocol—so vividly identified with Al Gore—a litmus issue. The rejection of Kyoto by the Bush administration energized the environmental community and many of the administration’s opponents. It also stirred a storm of opposition and criticism in Europe. “I remember going to Europe in 2001, and people were screaming at us that the administration was going to ignore Kyoto,” recalled Don Evans, commerce secretary at the time.

  Yet things were hardly shut down. The United States was spending half of the world’s total budget for climate change research, a sum that would rise under Bush. But the spending, inherited from the Clinton administration, had also been spread in a confusing mélange across thirteen different agencies. “All in all it was about five and a half billion dollars, and no one’s talking to the other people,” said Evans, who oversaw the main agency working on climate research. “One thing we could do was prioritize—what do we need to know and what information do we have to have to make reasonable policies.”4

  For this purpose, Evans turned to James Mahoney to take the position of Assistant Secretary of Commerce for Oceans and Atmosphere and Deputy Administrator of the National Oceanic and Atmospheric Administration. Mahoney was a climate modeler by academic training. He had a Ph.D. in fluid mechanics from MIT, where a mentor had been Jule Charney, one of the fathers of climate modeling. Mahoney had served as president of the American Meteorological Society and editor of the Journal of Applied Meteorology.

  Mahoney’s job was to organize and focus about $2 billion of the government’s research effort into a coordinated Climate Change Science Program. “If you are going to coordinate thousands of scientists, you need a framework, key questions,” he later explained. The research was organized around 21 questions. They covered a wide range of topics, such as: What happens to climate in the lower atmosphere? What is the history of climate variability in the Arctic and high latitudes? The strengths and weaknesses of climate models? The risks of “abrupt climate change”? And, getting closer to policy, how to incorporate “scientific uncertainty in decision-making”? As part of the review, the administration commissioned two studies by the National Academy of Sciences on climate change. In parallel, a second, $3 billion Climate Science Tech
nology Program was brought together under the Department of Energy.

  But there were big battles within the administration from the beginning, for as Mahoney put it, there were deep divisions and thus two faces to the climate program. One was “that we have to get the science right. But the other not-spoken message was ‘how many years will it take to get the science right?’ The implication was that we didn’t have to do anything in the meantime.

  “The Holy Grail of the science effort was a unified systems model of the earth,” Mahoney said. “But turn the corner and there is a whole rich tradition of decision making under uncertainty—decision analysis and policy development,” he said. “But there was very strong opposition to going there. There were major scientific questions, and a lot were being answered, but there will always be a lot of uncertainty with a whole earth system. You never know.”5

  THE FOOT-AND-MOUTH PANIC

  With the United States focusing on what the Bush administration generally described as the need for more research, the international advocacy on climate change would pass into the hands of Britain and, specifically, the government of Prime Minister Tony Blair. But it might not have happened in quite the way it did were it not for the outbreak of an epidemic among farm animals in Britain.

  In October 2000 David King, a Cambridge University chemistry professor, became science adviser to Blair. In his new job, King was initially focused on mapping out a low-carbon future. But in February 2001 the biggest outbreak of foot-and-mouth disease in world history erupted in Britain. As the country’s herds of cows and sheep were culled and burned, the nation was transfixed by the plumes of smoke that rose up from their pyres and spread across the countryside. All other science-oriented issues became secondary. Over the next six months, King emerged as the government’s point man for analyzing and managing the epidemic. The skill with which King directed the campaign brought him close to the prime minister and built a deep personal credibility. His participation, said Blair, was a “masterstroke” and of “priceless value.”6