John H. Gibbons
Climate Change, U.S. Business, and
The World Economy:
The Need for Environmental Technologies
Department of State
June 18, 1996
In 1945, Secretary of State James F. Byrnes returned from the conference
in San Francisco that set up the United Nations and stated that: "The
battle of peace has to be fought on two fronts. The first is the
security front where victory spells freedom from fear. The second is
the economic and social front where victory means freedom from want.
Only victory on both fronts can assure the world of an enduring
peace." Through the past nine Presidents and 22 Congresses, our
primary emphasis has been the battle for global security, based on
the uneasy politics of disarmament, nuclear deterrence and containment.
During that time, the second front has grown continually in both size
and complexity, shaped by the forces of globalization, technological
advance, population growth, environmental degradation, and social change.
As the image of the Cold War recedes, it is the "second front" which
advances. It is the plethora of human and environmental stresses which
now commands our collective attention. It is the human wants -- for
jobs, education, health, a sound environment -- and threats -- infectious
disease, illiteracy, mass migration, terrorism, and global change --
which now define the second front of security policy. In a recent
speech at Stanford University, Secretary of State Warren Christopher
again drew our attention to that broader concept of security --
the "second front." He described how a lasting peace depends upon
on our ability to deal effectively and equitably with the social,
economic, and environmental needs of a growing global population
while continuing to deter military threats.
Secretary Christopher articulated what many of us intuitively grasp.
We face a set of regional and global challenges which transcend agency
missions, disciplinary divides, and political boundaries. Our
traditional notions of national security and the role of science
and technology need to change. We must craft new policies and
priorities which can both sustain our military deterrence capability
and sustain environmentally-sound economic development. Last year,
President Clinton took the first step in this direction by issuing
the nation's first-ever National Security Science and Technology
Our work increasingly involves building new linkages; sorting out the
appropriate division of labor between the public and private sector,
beginning new partnerships between old adversaries and forming new
combinations of people, places, and ideas.
Global climate change is one of the new challenges we confront where
we have made and continue to make tremendous gains in understanding.
These gains in knowledge are significant in and of themselves: the
business of science is the production and synthesis of new knowledge,
and this process and its results are exciting in their own right to
scientists. But the findings are significant in other ways as well,
especially as they define future needs and future opportunities for
We have indeed learned a great deal about climate change since the
phenomenon of CO2 caused global warming was first elucidated
in the late 1800's. Over the past decade, the world's governments
have undertaken unprecedented assessment efforts to determine and
describe the state of our understanding through the Intergovernmental
Panel on Climate Change (IPCC), which has just released its
Second Assessment Report. More than 2000 of the most
prominent climate researchers from over 50 countries participated
in this effort.
The bottom line is that there is -- the revisionist few not
withstanding -- scientific consensus on the most salient issues.
We know that human activities are increasing the atmospheric
concentrations of carbon dioxide and other greenhouse gases that
affect atmospheric warming. Humans activities are also increasing
the concentrations of sulfate aerosols that tend to
the atmosphere by reflecting sunlight, but which also are the
main component of acid rain, especially in the northern hemisphere.
The atmospheric concentration of CO2 has increased nearly
30% since the industrial revolution due to human activities. Methane
has more than doubled. Nitrous oxide has gone up by 15 percent.
To put it plainly, we now know that the Earth's climate has changed
in the past due to a variety of "natural" phenomena but that it is
changing now in new and comparatively sudden ways. A few examples
will illustrate this latter point:
- the global average surface temperature this century is as
warm or warmer than any other century since at least 1400 AD;
- that temperature has increased by 0.3 to 0.6 C (about 0.5 to
1oF) over the last century;
- the last few decades have been the warmest this century;
- sea level has risen 10 to 25 cm (about 4 to 10 inches) over the
- (thermal expansion)
- mountain glaciers have retreated worldwide this century;
- 1995 was the warmest year on record.
Incidentally, the U.S. emissions of greenhouse gases currently
account for about 16% of the world total, but the preponderance of
emissions comes from rapidly growing developing countries.
The latest IPCC report contains a statement of particular significance:
"The balance of evidence suggests that there is a discernible human
influence on global climate." In other words, the "signal" of global
warming is beginning to emerge from the "noise" of normal variability.
The long atmospheric lifetime of many greenhouse gases, which is on
the order of decades to many centuries, coupled with the centuries-long
lag time for the oceans to equilibrate to temperature and CO2
concentration change, means that the warming effect of anthropogenic
emissions will be long-lived. Even after a hypothetical stabilization
of the atmospheric concentrations of greenhouse gases, temperatures
would continue to increase for several decades, and sea level would
continue to rise for centuries. Reversing the effects therefore
would also take centuries, and some impacts, such as species loss,
The broad outlines of a picture are beginning to emerge: Without
specific policies that reduce the growth of greenhouse gas emissions,
the Earth's average surface temperature is projected to increase by
about 1 to 3.5 C (about 2 to 6.5 F) by 2100, a rate of warming that
would apparently be greater than any comparable time interval over the
last 10,000 years.
Sea level is projected to rise by 15-95 cm (6-38 inches) by 2100.
Increased evaporation in a warmer world will lead to increased
precipitation worldwide that will be less evenly distributed in space
and time. Changed patterns in precipitation will lead to more floods
Stabilization of the atmospheric concentration of CO2, even at
up to three times the pre-industrial concentration, would eventually require
world-wide emissions of greenhouse gases to be cut below today's
levels. We know that climate change will be a significant new stress
on ecological and social systems that are already affected by
pollution, increasing resource extraction, massive population growth,
and non-sustainable management practices. The effects will vary
by region, and they may even be beneficial in some areas.
Unfortunately, the mostly negative consequences of climate change
are likely to affect the economy and the quality of life for this
and future generations. Let me mention a few:
- Human Health will be adversely affected. There will be increases
in the incidence of heat waves with high humidity like the episode
in Chicago last year that resulted in several hundred deaths.
Vector-borne diseases such as malaria, and non-vector-borne
diseases such as cholera, are likely to spread as conditions for
their survival change. To give just one example, we could face
an additional 50 million cases per year of malaria near the end
of the next century.
- Food Security will be threatened by changes in weather in some
regions of the world, especially in the tropics and subtropics where
many of the world's poorest people live.
- Water Resources will be increasingly stressed, leading to
substantial economic, social, and environmental costs, especially in
regions that are already water-limited and where there is strong
competition among users (we already know how contentious water rights
are, even in parts of the U.S., and in other regions of the world,
such as the Middle East).
- Human Habitat Loss will occur in regions where small islands
and coastal plain and river areas are particularly vulnerable to
sea level rise. For example Bangladesh is in danger of losing 17% of
its land, while the combination of sea-level rise and storm surges
could create 50 million environmental refugees in China.
- The composition, geographic distribution, and productivity
of many ecosystems will shift as individual species respond to
changes in climate. This may lead to loss of biological diversity
and threaten the ability of ecosystems to provide the purification
of air and water upon which we depend.
These are troubling and complex changes to confront, but fortunately,
our research efforts have also shown us that there are a variety
of approaches to adapt to and mitigate the impacts of climate
- IPCC points out that gains in energy efficiency of 10-30% above
present levels are feasible at little or no net economic cost in many
parts of the world through technical conservation measures and improved
management practices over the next 2 to 3 decades. The efficiency
of energy use, e.g., in the U.S. and Japan, has already increased by
over 30% since 1975.
- Significant further reductions in greenhouse gas emissions can
be economically achieved utilizing an extensive array of
technologies, and policy measures that accelerate technology development,
diffusion, and transfer in all sectors.
- Flexible, cost-effective, and internationally-coordinated policies
can considerably reduce mitigation and adaptation costs.
- Successful adaptation will depend upon education, technological
advances, positive public policies, institutional arrangements,
availability of financing, technology transfer, information exchange,
and incorporation of climate change concerns into resource-use and
development decisions. There are equity issues involved as well:
Potential adaptation options for many developing countries are
extremely limited by the availability of technological, economic, and
Thus, the science of climate change gives us cause for both concern and
hope. We do face a serious challenge, but we are not without tools.
One of the most important tools we possess is environmental
The global market for environmental goods and services is presently
over $400 billion and growing. The current global market for energy
efficiency is estimated at about $40 billion per year, even though
efficient lighting is presently used in less than 1 percent of
potential applications, and efficient motors and controls in less
than 3 percent of installed applications. Projections by Royal
Dutch Shell's forecasting group indicate that annual sales in
renewable energy technologies alone could reach $50 billion by the
year 2020 and almost $400 billion by 2040.
Besides technologies needed to address global environmental problems
such as climate change and stratospheric ozone depletion, there are
significant opportunities to address what some call "the brown agenda" --
problems of pollution and environmental hazards in cities where more
than 40 percent of the world population is concentrated. Presently,
90 percent of all sewage in the developing world is discharged directly
into rivers, bays and the oceans. Indoor air pollution from burning
of low-quality fuels in small stoves causes an estimated 4 million
deaths annually among infants and children through acute respiratory
Many of the technological solutions to these problems already exist.
There is a growing demand for the engineering, managerial, and
technical know-how which alone, or in combination with specific
hardware, can be applied to local or regional environmental problems.
For instance, with 70 percent of the freshwater resources worldwide
being used for irrigation there is enormous opportunity for water-
efficient irrigation approaches. The same is true for other
solutions which combine both software and hardware, such as integrated
pest management, efficient energy use, and environmental management
systems. But a number of factors interfere with meeting this
There is a funding gap for many environmental technologies: Innovations
are often undercapitalized or countries lack the capital to purchase
what they need. In Rio, in 1992, the UN Conference on Environment
and Development estimated that more than $500 billion per year for
the rest of the decade would be needed to achieve the goals set
forth in Agenda 21. Much of this financial need is in the
developing world. Even in the U.S. there is a significant shortage
of venture capital for environmental technologies, partly due to
uncertainties cause by the regulatory and permitting systems.
In addition, there is, in many paces, an ingenuity gap: Many
countries facing severe environmental stresses do not have the
knowledge infrastructure to assimilate and apply technologies, let
alone develop their own. Sub-Saharan Africa has less than 45
scientists and engineers in research and development for each one
million people, compared to more than 2900 for industrial nations.
Transferring or developing environmentally-critical technologies
in these areas will be extremely difficult, even if capital were made
available and free markets function.
Finally, there is often an information gap: Even with good
technologies, financing, know-how, and functioning markets, many
technologies simply never get applied. People are often unaware
of opportunities and how to pursue them. The environmental
technology industry is dominated by small and medium-sized
businesses which frequently do not have the capacity to exploit
overseas markets effectively. As former Ohio governor Richard Celeste
once noted: "You can always buy something in English: you can't
always sell something in English."
National Environmental Technology Strategy - Over the past two years,
we have worked with many of you to define and implement a National
Environmental Technology Strategy to support the development, domestic
use, and export of environmental technologies by U.S. business. We
met and brainstormed with over 10,000 people -- from industry,
academia, NGOs, and state and local governments -- at more than
25 workshops across the country. We believe this strategy is unique;
it was created with all the key stakeholders, and it capitalizes on
the resources of more than a half-dozen federal agencies including EPA,
DOE, Commerce, and Defense, and it includes public-private partnerships
and an integrated set of policies which
operate from the initial stages of R&D through commercialization and
export promotion. The strategy leverages important trends that are
taking place in industry, where more and more companies pursue
environmental excellence as a competitive strategy The strategy also
looks beyond our borders and supports U.S. businesses seeking to
capture rapidly expanding global markets for environmental
technologies. We have:
- Developed an Environmental Technology Export
Strategy to provide strategic market analyses of large emerging
environmental technology markets and support U.S. businesses interested
in moving into these markets.
- Developed an Initiative for Environmental Technologies (through USAID)
to focus development assistance on critical environmental challenges
in developing countries.
- Established a new Environmental Directorate at the Export-Import
Bank to assist U.S. businesses with loans for environmental projects
overseas. Funding for environmental projects at Ex-Im now exceeds
- Established the America's Desk (a State Department initiative) to
help to solve problems for U.S. businesses overseas and bring
business concerns to the forefront of the foreign policy process.
Finally, I want to remind you that we have been fighting an uphill,
and often counterproductive, battle with many in Congress over
the role of government in supporting environmental technologies.
Congress, despite industry support, reduced funding for the
Environmental Technology Initiative (run by EPA) by over 80 percent
in 1996, eliminating many programs designed to identify and reduce
regulatory and other policy barriers to the development and use
of innovative environmental technologies. Congress has recently
cut development of renewable energy programs by 30 percent. Out-year
funding cuts total almost 60 percent over the coming 7 years.
Though there is broad recognition in the both the public and
private sector of the importance of institution and capacity building
in foreign countries, AID's budget has been under continual attack
and been cut to less than half the level of the mid 1980's. But
AID is not alone. The impacts are deep and cut across almost all
Mind you, these Congressional cuts are being made to the President's
budget which is certified to balance in 2002. It's not a matter of
balancing the budget - it's a matter of conflicting priorities.
The President's protection of these investments to build our future
security is sound policy. Congress' less discriminating cutting is
not. All this comes at a time when many of our competitors are
increasing their investment in environmental technologies and their
commitment to the environmental technology industry. Japan recently
committed $430 million to develop and demonstrate their environmental
technologies. In China alone Program funds are slated to increase
$186 million next year. The Netherlands now has a $500 million
program to support the development of more sustainable technologies.
We face the reality of global competition.
The Clinton-Gore Administration does not intend to turn our backs on
a $170 billion sector of the U.S. economy which represents 60,000
businesses and over one million high skilled and high paying jobs for
Americans. Nor will we walk away from the opportunity to join
forces with industry and other stakeholders to develop a new
paradigm of environmental management. I hope that you will join
with us to support our efforts to implement the National
Environmental Technology Strategy; to foster productive public-private
partnerships such as the Partnership for a New Generation of Vehicles;
and, to develop a more robust science and technology for sustainable
We owe it to ourselves, our neighbors, and our children!
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