Our energy sources and capital equipment must look very different by the middle of this century if we are to avoid the most severe consequences. How will we power our economy? How will developing and industrialized countries alike achieve reductions in their greenhouse gas emissions while meeting their goals for growth? At a more everyday level, how will we get to work? What kind of office buildings will we work in? What kind of cars and trucks will we drive?

Our energy sources must look very different by the middle of this century if we are to avoid the most severe consequences

Some positive actions are being taken. Many countries are moving toward ratification of the Kyoto Protocol, and several programmes to trade greenhouse gas emissions are being developed. The UK Emissions Trading Scheme (ETS) – a national system to reduce emissions and allow for them to be traded – officially began in April 2002, while the European Union has developed a carbon dioxide (CO₂) emissions trading system. Despite the Bush Administration’s rejection of the Protocol in the United States, there is legislative activity in the US Congress and in the states aimed at reducing emissions. For example, Senators John McCain (Republican, Arizona) and Joseph Lieberman (Democrat, Connecticut) have introduced legislation that would establish an economy-wide greenhouse gas emissions trading programme. The bill is not likely to be enacted soon, but it has helped spark a long-overdue debate on just how the United States will live up to its obligations as the world’s largest emitter of greenhouse gases.

Business interest
An increasing number of leading companies, including members of the Pew Center’s Business Environmental Leadership Council (BELC), see a clear business interest both in reducing their greenhouse gas emissions and in helping to shape a climate-friendly future. The BELC’s 38 members represent nearly 2.5 million employees and have combined revenues of $855 billion. They have diverse strategies for reducing emissions. Alcoa, which operates in more than 40 countries, for example, is developing a new technology for smelting aluminium that, if successful, will allow the company to reduce its emissions to half 1990 levels over the next nine years.

Nevertheless, not nearly enough is happening. We must combine a long-term vision of a climate-friendly future with the short-term strategies that will get us there. We must ultimately dramatically reduce emissions of CO₂ and other greenhouse gases to protect ourselves, the global economy and the environment. We must fundamentally transform the way we power our global economy, shifting away from a legacy of fossil fuel use in pursuit of more efficient and renewable sources of energy. Society will have to engage in a concerted effort, over both the near and the long term, to seek out opportunities and design actions to reduce greenhouse gas emissions.

Starting now
In particular, we must determine how to meet the growing demand for electricity. No simple solution is on the horizon. We can expect a future with greater use of natural gas (if we can increase supply and meet infrastructure needs); with a steadily increasing use of renewables (and the progress of wind energy over the last decade should give us a glimmer of hope); with increased emphasis on distributed generation and combined heat and power; with nuclear at least maintaining its current share of the market; and finally with coal, if we are able to master carbon capture and sequestration and make it economically viable.

We must start now to identify the steps needed for the transition to a new, climate-friendly global economy. There are short-term strategies that could significantly reduce greenhouse gas emissions without radical changes in technologies or lifestyles. Efficiency improvements, for example, can both save money and reduce emissions. In the longer term, we cannot achieve our vision for the future – or even take advantage of the myriad of shorter-term improvements that are environmentally and economically advantageous – without strong greenhouse gas reduction policies. These could include:

• Mandatory reporting and disclosure of greenhouse gas emissions – from major sources, at the very least – where companies now acting to reduce their emissions are assured of credit under future mandatory regimes.

• A combination of financial incentives, technology standards, and other policies and programmes to expand the use of renewable energy, alternative fuels and technologies – and energy-efficient motor vehicles, appliances and buildings.

• The expansion of natural gas supply and infrastructure and the promotion of advanced coal technologies with carbon capture and disposal.

• Programmes to reduce greenhouse gas emissions coupled with flexible, market-based mechanisms such as emissions trading.

With more than 100 countries now committed to the Kyoto Protocol, this landmark agreement may soon enter into force. If so, its launch will send a strong signal to markets that emissions of greenhouse gases come with costs; it will be a declaration of multilateral will to confront a quintessentially global challenge. But it will be only a first step. With the United States not joining, the Protocol will cover just 40 per cent of global emissions, and only for the next decade.

We must start now to identify the steps needed for the transition to a new, climate-friendly global economy

Beyond Kyoto
Whether or not the Protocol comes into force, the challenge will remain the same: engaging all the world’s major emitters in a longer-term effort that fairly and effectively mobilizes the resources and technology needed to protect the global climate. An agreement that is going to work – that can bring in not only the United States, but developing countries as well – will in all likelihood be something other than Kyoto. Achieving it will take time.