President's Environment Advisor Speaks at Tokyo Press Conference
Council on Environmental Quality Chairman James L. Connaughton
August 7, 2007
CHAIRMAN CONNAUGHTON: Thank you very much, good afternoon everybody. I'm pleased to be here once again in Tokyo for the high-level consultations at Prime Minister Abe's invitation that will be between United States and Japan as we look forward to a very aggressive agenda on the issues of energy security, clean development, and climate change. Those conversations will begin formally tomorrow. I'm here a day early for a series of less formal visits with government officials, as well as with NGOs, as well as with industry representatives. I will be accompanied on this visit by Paula Dobriansky, the under secretary of state for global affairs, as well as accompanied by representatives of the Department of Energy. The meetings we will start tomorrow grew out of the bilateral visit between Prime Minister Abe and President Bush at Camp David earlier this year, and it will also deal with the topics introduced and the consensus reached at the G-8 in Heiligendamm, Germany, late in the spring of this year. We will be discussing the shared agenda between Japan and the United States on the advancement of technologies to support energy security, clean development, and climate change. We will be discussing the upcoming APEC meetings, where Prime Minister Howard of Australia has put clean development and climate at the top of the APEC agenda. And then we will be discussing the G-8 consensus on creating a process among the major economies to develop a strategy for the new framework post-2012 when the Kyoto Protocol expires under the UN Framework Convention on Climate Change.
The G-8 leaders' group had agreed that by the end of next year, we would seek to achieve agreement among the major economies on some of the core elements of a future strategy. So we will be discussing issues such as a long-term goal, global goal for significantly decreasing greenhouse gases. We will be discussing the development of nationally developed strategies for addressing energy security and climate change, as well as focusing on the key technologies and the key financing opportunities for bringing those technologies into the marketplace. We will also be discussing the process of creating a common system of measurement for greenhouse gases so we have better accounting of performance. All of this will contribute to the upcoming discussions in Bali, Indonesia, at the end of this year, and even more consequentially next year in Poland, and in the year after that in Denmark, which is 2009. So this will be an ongoing process. On Friday President Bush sent a letter to Prime Minister Abe inviting him to designate a personal representative to meetings that we will host in Washington. These meetings will occur shortly after the leaders meet at the UN General Assembly in a conference and discussion hosted by Secretary General Ban Ki Moon, and then we will have a series of meetings following data with personal representatives of the leaders and key government officials who are expert in the areas of the economy, energy, and the environment, and build out this agenda for action. So we have a lot of ground to cover tomorrow in the high-level consultation, and that ground will then be carried forward again in the APEC, at the UN General Assembly leaders' meeting, and then a series of senior official meetings after that. I look forward to taking your questions.
QUESTION: Hello. Isabel Reynolds from Reuters News Agency. I'd like to ask if you have a concrete view of what you expect to achieve while you're here in Tokyo. To have a goal as to what you want to take home with you?
CHAIRMAN CONNAUGHTON: As a result of these meetings, what we are hoping to achieve actually is a shared vision and shared agenda for progress at the APEC meeting, for progress at the Major Economies meeting, and then progress in the UN. We also need to sharpen the next steps of our joint technology cooperation. The United States and Japan are two of the countries leading the way on alternative fuel technology, including biofuels and hydrogen. The United States and Japan are two of the leading countries in the advancement of a new generation of safe and nuclear-proliferation-resistant civilian nuclear energy technologies. And we are also very focused on trying to find a pathway to how you produce power from coal without carbon emissions, which is probably one of the greatest technologies of the present day. We must pursue that technology agenda, because 70% of the future increase in CO2 globally is going to come from coal-fired power generation, and mainly from the major emerging economies, such as China and India, South Africa, and some of the other emerging economies. So we do expect a very tangible set of common ground agenda items that we will jointly pursue in each of these upcoming fora.
QUESTION: My name is Tetsuji Ida from Kyodo News. My question is your domestic policies - I know that a lot of legislation in creating mandatory cap-and-trade system is on the table with Congress, and some industries are very much supportive. I'm just wondering why you are still opposing the introduction of a mandatory cap-and-trade system?
CHAIRMAN CONNAUGHTON: The question is why are we opposed to mandatory cap-and-trade systems. Actually, President Bush has supported a mandatory regulation that will help us reduce greenhouse gases, and in fact President Bush's administration has already implemented a number of mandatory measures. So I think the premise of the question is incorrect. There are a number of different mandatory regulatory tools that we can use that include cap-and-trade. And I think what has happened is CO2 cap-and-trade has become misperceived as the only available to all. So for example, President Bush is already implemented new mandatory regulations requiring a 15% improvement in the vehicle fuel efficiency of our large trucks and SUVs, the big cars that America is famous for. President Bush also has signed into law a new mandatory renewable fuel requirement of 7.5 billion gallons annually by 2012, which the United States is now well ahead of track to meet. We are already nearing 6 billion gallons with four years, five years to go before the full amount has to be met. So those are examples of two programs were we do have mandatory requirements. President Bush also signed a law that mandates new appliance efficiency standards for the 40 most energy-intensive appliances. And that's just direct regulations; we don't need a cap-and-trade for that. That's a technical standard.
And the federal government has also encouraged our states, who have the primary authority to set renewable power requirements - and that's requirements for the generation of power with no emissions. Eighty percent of our power generation in America today is now subject to renewable power requirements. We are going to go from 5 gigawatts of renewable power from just a few years ago to over 32 gigawatts of renewable power - that's a six times increase in renewable power as a result of the state mandates, which the federal government provided technical assistance for. The federal government has also developed a model building efficiency standard that we are encouraging our states to adopt. That is another area where our states have the primary legal authority, and the federal government is providing technical support to help them achieve those goals.
But there's more than that. President Bush in his State of the Union this year called for new programs that would replace gasoline usage in America by 20% by 2017. The Congress is looking at those proposals right now. It is curious to us that the president's goal of replacing gasoline use by 20% by 2017 has not yet been put into legislative proposals by the Congress. All of the legislative proposals in the Congress are weaker than the president's proposal. So the president has staked out the most aggressive policy in this area, and we are currently negotiating with our legislature to get them to adopt a more stringent set of requirements. This will bring online a new generation of biofuels in particular that has an extremely low greenhouse gas profile. So for example, you're talking about cellulosic ethanol, which has a nearly zero CO2 profile, and in terms of greenhouse gases has about an 80% reduction in greenhouse gases associated with it, so these are massive reductions in greenhouse gases.
And in the same is true for vehicle fuel efficiency. The president has called for mandatory fuel efficient requirements across the entire passenger fleet of vehicles that can produce up to an 8.5-billion-gallon savings in fuel from vehicles. I would observe finally that the renewable fuel mandate the president is pursuing uses the cap-and-trade mechanism. It's just the criteria is the renewability and the alternative nature of the fuel with carbon waiting. So it is a form of cap-and-trade that's effective in the fuel sector. And this is something that has not been well reported. It is much more aggressive than anything that Europe has purpose so far. And different countries will use different tools. That's the bottom line. Thank you.
QUESTION: I'm Susumu Kojima from NHK. Regarding post-Kyoto framework, how confident are you to bring in countries like China and India? You have any strategy to do that?
CHAIRMAN CONNAUGHTON: It's very important as we go forward that all the major economies participate together in designing a new strategy, and that is because the future growth in emissions is going to come from the countries like China, like India, Brazil, South Africa, Mexico. The industrialized economies have already significantly contributed CO2. The emerging economies are going to end up contributing just as much, and so we have to work on this together. Through the Asia-Pacific Partnership on Clean Development and Climate, we have found a way to constructively engage China and India already, and that is by breaking the problem down into its component parts, which is power generation, transportation, industrial emissions, agriculture, buildings. The major emerging economies are very interested in becoming as efficient as Japan, as efficient as America is increasingly becoming. And so by focusing on the key sectors, we are able to find a way to constructively work with the emerging economies and in fact have found that they are willing to set ambitious goals as long as they retain sovereign control over those goals. And so one of the topics as we go forward in designing a new framework after 2012 is can we create a situation where countries are responsible themselves for developing their national programs, and those national programs will include binding elements as well as incentives and partnerships and other technology-advancement elements, and then making sure that they roughly compare to each other.
Now China is at a different point in development and the United States is, so we have to respect those different circumstances. On the other hand, China is purchasing a lot of new technology that it can install more rapidly, for example, that America, because we would have to replace something old, whereas China is building it new. And so there is an opportunity for countries like China and India and Brazil to move forward faster because they are making new investments and can buy the best of today's technology rather than trying to fix the installation of old technology. So this is where we hope to have productive discussions. It is also the case, there is a lot of opportunity for profitable investments, not just investments that come at a cost. And clearly profitable investments - any country is interested in those. So we find with methane recovery, for example, that can be achieved at a profit, so we can achieve a big amount of reduction if we can share technology and practices and skills with the key developing countries and have them use practices similar to the ones we use. So much to talk about, but we feel very confident, but we cannot know until the process is complete how much agreement we can achieve.
One other point, we've been encouraged by China in particular that has set very strong new national requirements in the area of energy efficiency and in the area of construction of new buildings, for example. These are very important decisions by the Chinese national government. So now what we want to do is work with them to effectively implement them and enforce them, which is where I think a bit of the challenge is.
QUESTION: I'm Mori from Yomiuri Shimbun. I heard you are traveling to China, Indonesia and India etc. later on this trip. Have you got any response from these countries?
CHAIRMAN CONNAUGHTON: The president in his letter to Prime Minister Abe designated me as his personal representative to these negotiations, so we are seeking to have these discussions at a very high level, very directly involving the leaders. Ahead of the G-8 meetings, I and other officials traveled to these countries to outline our ideas, to obtain their input, and then when the President made his announcement on May 31, he made it based on a lot of consultations with a number of key countries, including China and India. We do not want to make the announcement without speaking to them first. The G-8 process, then, further developed these ideas, and we achieved consensus in the G-8 on the overall outline of the way forward, and then we further discussed that with the leaders of China, India, South Africa, Brazil and Mexico. This trip, I and Dr. Watson and Under Secretary Paula Dobriansky and about half a dozen other officials are going out to the various countries to have one-on-one discussions on the agenda for our meetings. So I will be going to Beijing, to Seoul, to Jakarta, and then down to Melbourne, Australia, so we can have very detailed conversations about how to organize our meetings and how to aggressively push the agenda. And you'll see that with the other countries as well, so by the time we get to the APEC meeting, and by the time we get to the UN meeting and the Major Economies summit, we'll already have done a lot of work. We won't be starting from zero. And that's very important because time is very short to try to conclude an agreement on a framework.
Now in terms of managing expectations, we are trying to reach agreement on a framework. There will be a lot of substance to be developed afterwards, but if we can agree on the broad outlines of a future approach, we then would have a high confidence that the substance would be filled in well as we go forward. So you should expect a little of both - the substance and then mechanics, the framework of a way forward.
QUESTION: Seiko from Nikkei. It's been said that the U.S. is reluctant to impose emission reduction on private firms because of not wanting to give negative effect to the economy. Has the stance changed, or are we misunderstanding the U.S. stance?
CHAIRMAN CONNAUGHTON: The U.S. position is no different than the position of any other major country. We want to take aggressive action on climate change, and we want to do that in the context of economic growth and opportunity. I am not aware of a leader anywhere in the world who is intentionally proposing policies that will put people out of work and shut down their economies. So I think the perception is a false one. The U.S. has been most vocal about making clear, not just in the developed economies, but also as we work with the developing countries, that economic growth is essential. If you do not have economic growth, you do not have the resources to pay for the technologies that make the climate solution possible. The major developing economies need access to energy, so the answer to climate change is not less energy per se. The answer to climate change - and clean air - which is a very big issue in Japan in terms of the air pollution that comes from across the sea, the answer is going to be the use of energy with lower air pollution and lower carbon emissions, and that's a technology solution and an energy efficiency solution.
And so we know from experience that the countries that have experienced the greatest economic growth, with policies that are encouraging investment in technology, have enjoyed the fastest rate of progress in tackling emissions. The United States, for example, last year in 2006 saw greater than 3% improvement in our economic growth, and we saw a 2.5% improvement in efficiency - I'm sorry, we saw a 4.5% improvement in our efficiency and a reduction for the first time of greenhouse gasses of 1.6%. So strong economic growth, strong improvement in efficiency, delivers a real reduction of emissions.
We want to be careful about strategies that would reduce emissions by putting people out of work and simply moving those emissions to other countries, which is one of the issues in our relationship with China and India and other major developing countries. When you see steel manufacture going from America to China, and we are bringing the steel back to America, you are probably talking about a net increase in emissions, not a decrease in emissions. So we want to be careful about taking credit for emissions reductions that aren't really happening. So we just have been quite vocal in the United States about calling attention to these unintended consequences of a very well intentioned policy. Now that will earn us criticism from time to time, on the one hand; on the other hand, we've been encouraged that, as part of the G-8 process and in the upcoming APEC meetings, the leaders themselves have now come together to understand that energy security, clean development and climate have to be addressed together, and that's a very important transformation in the way we have been thinking about this issue. And they're all important, and so we need the strategy that achieves all of them at the same time. It's more complicated, but ultimately it's more sustainable in terms of lasting progress in reducing emissions.
QUESTION: I am Yamada from Mainichi newspaper. At the end of September, there is going to be a conference hosted by the United States. Would it complement the UN conference? Is my understanding correct? And on the other hand, there is the existing UNFCC, but are you trying to make a separate initiative under the United States apart from the United Nations?
CHAIRMAN CONNAUGHTON: When the president announced his proposed policy on May 31, the president made very clear that his proposal to convene the Major Economies was a proposal that would accelerate the discussion and that would contribute to an ultimate outcome in the UN. There had been some uninformed concern raised about that, but the president - that was a complete misreading of what the president said in May. That commitment to bringing this focus conversation among the major economies to the UN was reinforced in the G-8 leaders' declaration, that made very clear that the Major Economies would develop a detailed contribution by the end of 2008, and that would be brought to the UN to try to achieve ultimate agreement by the end of 2009. That is a very aggressive schedule. That is not a slow schedule; that is a very fast schedule. These things typically take five or six years to work out. So we are committed to the UN process, and we are committed to a new dialogue under the UN process, and from what we can tell, most of the other countries are in the same place. We just now have to give shape to that commitment.
QUESTION: You mentioned nuclear power as one sort of arm of the climate change policy. Did the earthquake and its consequences in Japan cast any doubts in your mind over the wisdom of using nuclear power for that purpose?
CHAIRMAN CONNAUGHTON: I think there will be much to learn from the review that follows from the earthquake, and the engineering of that plant. And that learning will be taken up in the design of future plants. It remains the case that nuclear power is the only existing source of base-load reliable energy that can be produced with no emissions. It also remains the case that nuclear power to date still has the best safety record of all the various power resources, and nuclear power on the whole has the smallest environmental footprint of all the power generating sources. Also, there is no question that if we want to achieve anything close to an ambitious level of emission reduction, nuclear power has to be part of the power-generation equation. There is no expert out there who can point to a pathway toward a substantial reduction of greenhouse gasses in the absence of a substantial increase in the use of nuclear power. It is not the only solution. We have to add a lot more, and we will add a lot more renewable wind, zero-emission solar, geothermal, but that will come online incrementally. And those sources right now do not provide a reliable base-load source of energy. They are supplementary power, and so we want to keep our hospitals running. We want to keep our schools open. We want to have climate control, especially for the elderly and the sick. So base-load energy still is fundamental to the stability of our international global economy, and therefore we have to keep advancing all of these technologies.
The United States working with Japan are leading the way on something called the Global Nuclear Energy Partnership to create an even stronger base of shared commitment to the advancement of technology in the nuclear power area. It also is to reduce the military threats associated with the proliferation of nuclear materials, as well as to make nuclear power even more efficient and make even more effective reuse of spent nuclear material. So this is very important for the globe.
But let me give you further perspective. China has said they would like to build up to 30 new nuclear power plants. If China is successful, that will still represent less than 4% of their power, that's if they build 30 new plants. China is going to be building a lot of coal. So we either figure out how to make coal low-emission for CO2 or we have to massively switch to nuclear and to other zero- and low-emission sources. That is a decision we will confront relatively soon, so we need to give the low-carbon coal technology development a chance, but if we want to keep global temperature in check, we need to move that much more rapidly than we had been moving it.
Then again, the only available solution to replace that amount of coal as we go forward is nuclear, and so, hopefully, those who claim to be serious about climate change will become much more serious about the safe and effective use of nuclear power.
QUESTION: I'd like to know the United States' domestic measures again. You mentioned that President Bush already proposed very effective measures, but it is true that there are dozens of bills in the Congress, many of which propose introducing cap-and-trades, so could you tell me your perspective how it will develop in the future?
CHAIRMAN CONNAUGHTON: Since the mid-nineties, every year in our Congress, there have been dozens of proposals on cap-and-trade, and none of them have passed. Since the mid-nineties, however, there have been many other sector-specific proposals many of which have passed, and so we will face the same dynamic in this session of the legislature. There will be a wide range of proposals, and then there will be a different level of interest in each of them.
We just modeled one of the economy-wide cap-and-trade proposals. At the upper bound of the modeling, it suggested that the cost of compliance could come in as high as one trillion dollars a year. That is a huge cost. On the other hand, we have some more focused mandatory policies, such as the president's State of the Union proposals, which themselves are quite costly. One of them is over a hundred billion dollars, but will actually lead to the investment in technology and lead to a lasting reduction of emissions. So we just have to weigh not just the cost of these pieces of legislation, but the environmental effectiveness of the legislation.
The policies the president supports are those that will produce a real outcome, based on a real investment in technology in America. We have not supported policies that simply achieve a reduction by paying somebody else to do it for us. We also are deeply concerned about focusing our policies on investments in the next generation of technology. Because the current generation of technology, in the absence of a big switch to nuclear power, which is challenging, the current generation of technology will not deliver the amount of emission reductions that we need. So we want to be careful not to squander our money on existing technology that would otherwise be available to advance and bring down the cost of the next generation of technology. So we have to balance those considerations. Our Congress is just beginning to focus on these much more complex questions in a specific way this fall. And so we'll have to see how the legislative dialogue goes.
The president and his administration have been working very constructively with the Congress on all of these proposals, and we've been highlighting the ones we think have a lot of value, and we've been raising questions with the ones we think will create these unintended consequences. And the Congress, I think as you have seen, has said they will produce a cap-and-trade legislation last March and they didn't, they said they would produce one by May and they didn't, they said they would produce one by Independence Day and they didn't, and now they've said they will produce one in the fall. So this is the American legislative process.
As members of Congress learn more and more about the economic impacts, and as they learn more and more about the environmental questions about the effectiveness, they are rational, smart people, and they are now being much more deliberate about some of these ideas. We are very encouraged that we will see something on renewable fuels. There seems to be a lot of bipartisan support for that across our two parties. We think there is a very good prospect of something new on vehicle fuel efficiency, although the Democratic Party is divided on that. So the party in control is divided within itself on that issue. We think the cap-and-trade proposals, especially the economy-wide ones, will require a lot more conversation before you see anything pass our Congress.
I would further observe that these issues in America do not divide along party lines. They divide along regional lines, so that if you are a Democrat or a Republican in a state that relies on a lot of coal and has a lot of manufacturing and trucking, you're going to be much more concerned about these proposals than if you're in a state that has a lot of hydropower and provides a lot of services, like California. So they are not as concerned because they already have a good profile. So these issues cut on regional lines, not on political party lines.
QUESTION: I understand that President Bush emphasizes the possibility of breakthrough technology, but there is no guarantee that that breakthrough might happen, even if you invest a lot of money. So if you rely on such a possibility of a breakthrough, it will be a kind of gambling in Las Vegas. How do you think?
CHAIRMAN CONNAUGHTON: I think the straight answer is that we have no choice. In power generation for example, if the world is going to continue to use coal, which is reliable and affordable, and a secure source of energy, then we need a breakthrough in addressing the carbon emissions from coal. Coal is going to be 70% of the future growth of emissions. That's how big a share of the problem it is, and so a technological breakthrough is critical.
If we do not achieve it relatively soon, then the globe has to make a commitment to building new power with nuclear power, supplemented by renewables, which, again, are very beneficial, but have the problems that I described in terms of baseload. We have to be honest about that. By the way, the nuclear power technology exists. We don't need a breakthrough on nuclear power. We can make it better, but we don't need a major breakthrough on nuclear power to do it. There are a lot of political and logistical and engineering constraints to building a lot of it fast.
In terms of transportation, there is no question that if you are going to deal with the rise in CO2 from transportation, you have to find an alternative to oil. That's initially going to be biofuels, and things like plug-in hybrid cars, to dramatically cut the oil consumption, and then ultimately, hydrogen. Japan and the United States are leading the way in all three, and in particular on hydrogen. But if you want a lasting solution to both air pollution and greenhouse gases, we need a big conversion and then maybe somebody will figure out how to just deal with CO2 emissions from oil, but not yet, and that doesn't appear to be close. We are greatly encouraged by the advances in biofuels, and that's why the president made such a large, new commitment to biofuels in the mid-term. We've come up with loan guarantees for the construction of the first commercial cellulosic ethanol plants. So we'll have three new, commercial-scale plants up and running by 2010 in America. And as I indicated, cellulosic ethanol, which is made from agricultural waste products - not from the corn kernel - that has a very, very low CO2 and greenhouse-gas profile. So that's at hand; that's within a few years that we'll commercialize that. And then the question is, how rapidly can you ramp up to refining and generation of that and get good distribution networks to get the biomass material into those facilities.
Countries like the United States, like New Zealand; you know, we're the Saudi Arabia of biomass. We have a lot of agricultural waste material that we put in landfills today that actually produces methane that can be emitted in the atmosphere. So if we can capture all that and actually make it into fuel, the net balance is great from a climate-change perspective, and the energy security advantage is also quite substantial: much more substantial than corn-based ethanol alone. So these are the opportunities, these are the needs, and we just have to be open and honest about the scale of the challenge before us. Marginal improvements of efficiency, while important, are not enough. And so we need all of it.
QUESTION: This is Tokyo Shimbun daily writer Toshiya Kaba. So, you just talked about after the Kyoto Protocol framework. So, all those countries expect ratification for Kyoto Protocol; I want to know the possibility about ratification for Kyoto Protocol by United States, and how do you think about it?
CHAIRMAN CONNAUGHTON: The Kyoto Protocol today - the countries with obligations under the Kyoto Protocol today represent roughly about 30% of emission. The Asia-Pacific Partnership involves countries representing 50% of emissions. The Major Economies Discussion that the U.S. is going to host will involve countries that represent 90% of emissions. So I hope you can appreciate that the scale of what we are trying to achieve and the ambition is much greater in this Major Economies process.
The current structure of the Kyoto Protocol creates difficulties not just for the United States and Australia and other countries who have not been part of it, but (for) the major developing countries, it's the structure of it. It just wouldn't work if we're trying to get forward progress by all countries. The Kyoto Protocol currently does not expect anything of the major emerging economies, and yet they represent most of the future growth in emissions. I think it's 70% to 80% of future emissions will come from the major developing economies, not from the current developed economies. In fact, if you look at the charts for the U.S. and for Europe and Japan, you might see a slight increase and then a falloff in emissions. The growth in emissions is elsewhere.
So we have to find a strategy that includes every major economy, and that's going to require just a rethinking of what works in the Kyoto Protocol, in the Framework Convention, and what's not working. And hopefully we can have a full and frank discussion of those issues in the smaller working group, and then bring that back to the much larger group of countries involved in the Framework Convention process.
And, oh yes, we are not going to ratify Kyoto; we've made that clear. And we are still in that position. But I think the international conversation has moved well beyond that, anyway. The countries that are in Kyoto are working to achieve it; many of them will not meet their goals. But we will learn why, so we'll learn what worked and what didn't work. Some of the countries will achieve their goals, but some of them will achieve them for reasons having nothing to do with climate policy. So we'll learn why that was and what strategies worked.
Other countries, such as Australia, are already meeting the Kyoto goal; and Australia did not ratify Kyoto in principle because they didn't think the structure was appropriate. So we have a lot of different countries in different positions on this. This is an enormously consequential and complicated issue. This is much more complicated than a fishing treaty or a treaty on a specific chemical. This is about the entire economy of every major nation on earth. And so I think we should be a little more forgiving of ourselves as to the level of understanding of what will work and what won't work. You know, this a work in progress, and it's going to require a sustained level of effort over the course of this century. And that gives us the time and the necessity to be thoughtful about the next approach.
QUESTION: Ida Tetsuji from Kyodo News again. Is it correct to understand that you don't like to have a national reduction target in the post-Kyoto agreement? You prefer to have some kind of sectoral-based approach you're talking about? And my second question is, do you support the idea to set up some kind of roadmap or mandate in [inaudible] meeting in future negotiations of the post-Kyoto agreement?
CHAIRMAN CONNAUGHTON: In terms of midterm targets, we don't know yet what each country may produce. America has an economy-wide goal that the president announced in 2002 to improve our greenhouse-gas intensity by 18% by 2012. So we already have a precedent of establishing an economy-wide goal and then working on that on a sector-by-sector basis.
The Kyoto countries have the economy-wide cap that they accepted under Kyoto. But even there, each of those countries has broken it down into sector-by-sector approaches and used different tools for each sector. So for example, Europe is the only country today still that has a cap-and-trade, and it's limited to large industrial plants and to power plants. Their cap-and-trade does not apply economy-wide. No country on earth has an economy-wide cap-and-trade program yet; although somehow people think that's the case, it's not. And some countries, for example have - Europe has heavy taxes on fuel. America has chosen a regulatory approach to fuel efficiency and alternative fuels. So we have chosen different policies, depending on our national circumstances. So we would expect from this process that each country would develop and establish sort of a clear set of commitments in the major sectors, at least, and that some of those commitments would take the form of binding requirements within their national structures. And by the way, that's much more powerful even than at the international level because, you know, it's domestic law. And so it's clearly enforceable; it has the political will behind it at the domestic level and can be efficiently and effectively enforced at the domestic level. So we see actually great power and even greater effectiveness.
China, for example, has articulated - this goes to the other part of your question - an extremely ambitious energy-efficiency goal for their entire economy already, and that's to improve energy efficiency by 20% by 2010. That's a huge undertaking for China, and that's economy-wide. And if successful, or if even partially successful, that will offset a very significant amount of greenhouse gases. So we want to encourage that. And so if China's willing to do that on its own and then enforce that through its own processes, that's a good thing. That's not a bad thing. And if they do it more broadly in other sectors such as transportation, their steel manufacturing, and some of these other sectors that involve a lot of emissions, we can encourage that. And we can compete on that basis by having our sectors compete with each other for their energy efficiency and their environmental effectiveness. Sometimes that kind of market-based competition produces even better results because they can figure it out faster than the government can. So we shouldn't be shy of those approaches, either. I think Japan has probably been the most successful country in that regard with its sector commitments that the government has done an effective job of enforcing without a regulation. I think you've got a strong culture of commitment and achievement of those commitments in Japan without a regulation. And so we shouldn't frown on that, either.
Ok, so thank you all very much, and look forward to your coverage of this very important set of conversations as they unfold during the coming year.