“Global Climate Change: the Role of the US Private Sector and Government”

Speech delivered by Ambassador Blake during the Seminar on Global Warming: Challenges and Opportunities for Sri Lanka

Governor Cabraal, Ambassador Moonesinghe, Professor Munasinghe, Mrs. Yasaratne, Ladies and gentlemen, I am pleased to be here today and I welcome the opportunity to address you on what is widely accepted as the top environmental issue of the millennium and of enormous importance to the United States and to Sri Lanka.

I’d like to use my time to discuss briefly the problem, the role of the private sector in developing new clean technology, and the US Government’s policy on global warming. 

First, The Problem

• Man-made “greenhouse gas” emissions have dramatically increased since the beginning of the Industrial Revolution. The result of unprecedented economic growth and development, these emissions come at a significant cost to the planet.
• Global temperatures have steadily increased with the warmest 20 years in recorded history occurring in the past 22 years. Polar ice is melting, habitats are shifting for many species, and the strength and intensity of storm events are on the rise.
• The scientific evidence for a direct link between increasing emissions and global warming is broadly accepted now with the recent release of the 4^th Intergovernmental Panel on Climate Change report by more than 2,000 top scientists and accepted by 180 countries, including the United States.

What Then is The Role of the Private Sector in Clean Technology?

The United States believes that Clean Technology has a critical role to play in addressing Global Climate Change (or GCC as I shall call it hereafter).

• The international media has been focusing intently on GCC in the past year, and the dialogue has shifted recently from “IF” global warming is real to “HOW” we as a global community can deal with the problem.
• Clearly the private sector will have a major role to play.  The challenges presented by global warming present great opportunities in terms of new “cleantech” industries and jobs, as we seek to adapt to a warming planet, and seek alternatives to oil and strive for energy security by developing renewable sources of energy like solar, wind, and hydropower, all of which Sri Lanka has in abundance.
• In terms of new economic opportunities and jobs, cleantech became the third-largest North American venture capital investment category (11 percent of all venture investments), just behind software and biotechnology in 2006. Total North American venture capital invested in cleantech companies reached $2.9 billion in 2006, an increase of 78 percent over the $1.6 billion invested in 2005.
• This boom in cleantech in the United States means jobs and potential partnerships for countries with a tech savvy workforce. A recent cleantech investment study by the U.S. business coalition Environmental Entrepreneurs estimates that additional U.S. cleantech investment between 2007 and 2010 will be between $14 billion and $19 billion, resulting in 400,000 to 500,000 new jobs in the United States.
• Major U.S. corporations have entered the cleantech arena in the past few years, reflecting the conviction that mainstreaming environmental sustainability measures makes great business sense. Leading businesses ranging from the major automotive companies to the energy industry to information technology have become “green”.  Two examples:
• General Electric Chairman and Chief Executive Jeff Immelt recently declared that GE’s "green" Ecomagination unit is on track to "blow away" its 2010 sales target of $20 billion as demand for environmental products and services surges. After only two years in operation, Ecomagination has a backlog of orders worth $50 billion for products like wind turbines, aircraft engines and energy conservation technology. Last year, it had sales of $12 billion.
• Also in 2006, IBM announced its new “Big Green” initiative to tackle global environmental issues by focusing its tremendous computing and manufacturing capabilities on innovative ways to address large-scale environmental problems, including GCC. For example, IBM announced in May 2007 that it is redirecting $1 billion per year across its businesses, mobilizing the company’s resources to dramatically increase the level of energy efficiency in IT. 
• The plan includes new products and services for IBM and its clients to sharply reduce data center energy consumption, transforming the world’s business and public technology infrastructures into "green" data centers. The savings are substantial -- for an average 25,000 square foot data center, clients should be able to achieve 42 percent energy savings. Based on the energy mix in the US, this savings equates to 7,439 tons of carbon emissions saved per year. 

U.S. Policy

While the private sector has clearly seen the opportunities emerging from a clean technology response to the threat from Global Climate Change, the U.S. government has also adopted an ambitious tack in recent weeks, with the announcement by President Bush at the recent G8 meeting in Germany that the U.S. will now participate in and help lead global efforts, within the UN framework, to develop a follow on to the Kyoto Protocol (post- 2012) by the end of 2008. 

The president’s proposal is based on the principle that climate change must be addressed by fostering both energy security and economic security, by accelerating the development and deployment of transformational clean energy technologies.

The president proposes that all countries work within the UN process to strengthen programs addressing:

• Energy efficiency;
• Advancing global transfer and adoption of clean energy technologies, and
• Land management-  such as sustainable forestry and protecting the worlds forests.

Two months ago, President George Bush announced stronger climate change strategies that commit the US to an ambitious plan to reduce domestic greenhouse gas emissions relative to the size of the American economy. This will be achieved by striving to cut down emissions per unit of economic activity, that is greenhouse gas intensity, by 18% over the next 10 years. The US will also continue to support international research, invest in science and technology, and join hands with the international community to develop an efficient and coordinated response to global climate change.

In his “Twenty Ten” plan, the US President has also directed relevant agencies to take the necessary steps to cut gasoline consumption and greenhouse gas emissions from motor vehicles by 20 percent over the next 10 years.  In the US, some states have on their initiative gone further than the federal government in proactively curbing greenhouse gas emissions within the States – California and Oregon have been in the forefront. 

Countries in the developing world are justifiably focused on economic growth and providing for the health, education, and other needs of their citizens. The United States believes that climate policies should recognize and complement these priorities, and has launched or is involved in dozens of partnerships designed to alleviate poverty and spur economic growth in the developing world by modernizing energy services.

In addition to our 15 bilateral and regional climate change partnerships launched since 2002, the United States has initiated partnerships to promote the development and deployment of key climate change related energy technologies, including:

• The Methane to Markets Partnership (M2M): With 20 partners and an extensive project network, M2M could recover 50 million metric tons of carbon equivalents annually by 2015.
• The Carbon Sequestration Leadership Forum has 22 partners that have approved 17 carbon capture and storage projects as well as a technology roadmap to provide direction for international cooperation on carbon sequestration. 
• The International Partnership for the Hydrogen Economy members around the world are working to advance research, development, and deployment of hydrogen and fuel-cell technologies, while also developing common codes for hydrogen use.
• The Asia-Pacific Partnership on Clean Development and Climate initiative engages the governments and private sectors in 6 key nations -- Australia, China, India, Japan, the Republic of Korea, and the United States -- that account for about half of the world’s economy, energy use and greenhouse gas emissions. Partners are enhancing deployment of clean energy technologies to address their energy, clean development, and climate goals.
• Of potential importance to Sri Lanka is the White House’s intention to encourage more investment in developing nations – by making low-cost financing options for clean energy a priority for the international development banks.  I understand that the World Bank has just announced an additional $40 million loan program for rural solar energy solutions in Sri Lanka.

We will also work to conclude talks with other nations on eliminating tariffs and other barriers to clean energy technologies and services by the end of this year. 

America also is stepping up efforts to make advanced energy technology commercially viable: 

1. We are working to expand the use of clean coal technology, solar and wind energy, and clean, safe nuclear power. 
   
   Here in Sri Lanka, the US Agency for International Development has worked with the Ceylon Electricity Board to help foster private sector entry into commercial wind development, resulting in new private sector investments in wind farm development in the Puttalam area.
   
   
2. The U.S. is expanding the use of hybrid and clean diesel vehicles and biodiesel fuel.
3. We are continuing to invest in new methods of producing ethanol – using everything from wood chips, to grasses, to agricultural wastes.
4. We are pressing on with battery research for plug-in hybrid vehicles that can be powered by electricity from a wall-socket instead of gasoline.
5. We are continuing research into advanced hydrogen-powered vehicles that emit pure water instead of exhaust fumes.   But while fuel cells are an emerging technology in the vehicle industry, it will need a hydrogen infrastructure to make it work. 
   
   For example, it is essential to find environmentally friendly ways of producing hydrogen. Sri Lanka is one of the countries which could harness its untapped wind energy resources for generation of Hydrogen through electrolysis. According to the National Wind Atlas developed with USAID assistance, there is an abundant supply of wind energy in Sri Lanka. Due to technical limitations, only a small fraction of the available wind power could be converted into electricity in grid-connected wind power plants. In this context, it might be strategically important for Sri Lanka to embark on a program to use wind to power electrolysis to generate a sustainable source of hydrogen.
   
   
6. U.S. Embassies around the world are being built and retrofitted according to “Green Building” standards designed to increase energy and water efficiency, save operations and maintenance costs, and reduce our environmental footprint. Here in Sri Lanka we are planning for a new “Green” Embassy that we hope will be a model to inspire more green building here.
7. As part of our tsunami reconstruction program USAID is building two state-of-the-art vocational education facilities according to green standards established by the US Green Building Council, the so-called Leadership in Energy and Environmental Design (or LEED) standards. 

Conclusion

In conclusion let me again commend the organizers of today’s important conference, say that the United States is pleased with the work we already have accomplished with our Sri Lankan partners to address the threat of global warming, and assure you that the future is bright for even greater cooperation in the future.   

More information about the U.S. approach to climate change, as well as information on our many related programs, can be found at:

http://www.usaid.gov/our_work/environment/climate/index.html

http://www.state.gov/g/oes/climate

http://www.whitehouse.gov/infocus/environment/

Thank you and all the best for a successful seminar.