“Foundations” – A Q&A with Peggy Duxbury, Environment Program Officer

 

“Foundations” is a regular series of informal question-and-answer sessions with employees and others affiliated with The William and Flora Hewlett Foundation to give them an opportunity to explain their work.

Peggy Duxbury is a program officer with the Foundation’s Environment Program. She makes grants to minimize damage from fossil fuel development in the West, promote renewable energy sources, and encourage energy efficiency.

Before joining the Foundation, Duxbury served as director of governmental and regulatory affairs at Seattle City Light, where she was responsible for external affairs at one of the largest municipal utilities and the first in the nation to be carbon neutral. Before that, she was the vice president of government and environmental affairs for Calpine Corporation, the nation’s seventh largest electricity producer. Duxbury earned a bachelor’s degree in political science and economics from Old Dominion University and a master’s degree in public administration from the Kennedy School of Government at Harvard University. She then had a one-year research fellowship at Harvard Business School, where she helped develop a business curriculum focused on environmental and energy policy.

Here she discusses energy policy and combating global warming in the wake of the 2009 United Nations Climate Change Conference in Copenhagen.

What happened at the global summit on climate change in Copenhagen last December, and what does it mean for energy policy?

Early on, the expectations for Copenhagen were fairly ambitious. Those who follow the issues thought that there would be a strong global agreement to follow up the Kyoto Protocol, the international agreement to reduce greenhouse gases, and that the United States would be a major participant. Experts also thought that the participating countries would find a way to bridge the most challenging gap: the differing views of the wealthier countries – those of Europe, the United States, and Japan, on the one hand – and the large, fast-growing ones – China, India, and Brazil, on the other – about how to fund the effort. It didn’t happen.

What did come out of Copenhagen was a broad, nonbinding agreement among participants for a continued commitment to fight climate change and for each country to state or restate its targets for reducing greenhouse gases.

The positive outcome is continued and increasing commitment from key developing countries like China, India, Brazil, and Mexico to set aggressive targets to reduce greenhouse gases. There is also a continuing willingness to work through diplomatic channels to get this done.

What has changed as a result of the lack of agreement in Copenhagen?

For one thing, it’s not clear how much longer this process under the auspices of the United Nations will be the primary diplomatic means toward global agreements on climate change. Some people are wondering whether it may be too cumbersome and complex to get the job done, and whether there are better ways to move this complicated task forward through the United Nations and diplomatic channels.

Right now, post-Copenhagen, you’re seeing the most activity in bilateral and regional agreements. So, for example, there are more agreements between the United States and China on clean energy strategies and the transfer of green technologies. European Union countries are engaged in more discussions about how to move their climate strategies forward in a post-Kyoto world.

There’s also a lot of interest in finding ways for the developed world to help the developing world finance low-carbon growth. The financing mechanisms still aren’t clear, but people want to develop them, and that’s very hopeful.

So are we starting to see policies and agreements to prevent climate change despite the lack of progress in Copenhagen?

Globally, the ideal is still a strong, binding international treaty that the majority of countries support. In the United States, the ideal at the federal level is to create some kind of economic consequence for emitting carbon and to enact a carbon trading program that gradually reduces what can be emitted. Many advocates still want to push for both of these goals, but they seem less promising than they did six months ago.

Recognizing those challenges, our grantees think they can get close, and perhaps even reach the same ends, by following a variety of other policy options. Internationally, the answer may be more multilateral and bilateral agreements to reduce emissions and continued work on transferring green technology.

At home, a variety of options to reduce carbon emissions can be pursued without a national price being set: a national renewable energy standard, a strong national energy efficiency standard, and several other advances that can be made through executive orders and regulatory changes instead of the legislative process. One is the Environmental Protection Agency’s regulation of greenhouse gases. Another promising avenue is the military’s aim to set very aggressive goals for reducing greenhouse gases in its activities. The Department of the Interior is working to construct large renewable energy projects on public lands in ways that protect important habitats.

So in some ways, the strategy to fight climate change is less clear than it once was. Yet it’s also a very interesting time because multiple approaches are unfolding. It’s making lemonade from lemons, but if our grantees can be flexible and nimble, there’s hope that some interesting policies in 2010 will move toward the ultimate goals of Copenhagen.

Can you clarify what it means to create an economic consequence for businesses that emit greenhouse gases?

It’s called creating a “price signal.” In our society, there’s no economic consequence for emitting a ton of CO₂ into the upper atmosphere. Right now, it’s free. But we know it’s not really free. There are costs to the atmosphere and world for emitting that gas as well as costs to our economy, but those external factors have not been considered as a cost of doing business. Putting a price on carbon emissions provides an incentive not to pollute and can help encourage new cleaner energy technologies to come to the market.

One price signal would be a carbon tax – the more a business emits, the more it pays. Unfortunately, this approach doesn’t guarantee a reduction in emissions. Businesses might just pay the tax as an additional operational cost. And taxes are controversial. The other alternative, which had been getting more attention, is cap and trade – the government sets a cap (that declines over time) on the total amount of gas that can be emitted, and then businesses buy and sell the right to emit.

What’s happening on these issues at the state level?

Hewlett environmental grantees are most active in the western states, which have made some big commitments to renewable energy and energy efficiency in the past few years. California’s hallmark state legislation, AB 32, is the strongest in the country to address climate change, although there currently are efforts afoot to repeal it. Perhaps the most exciting work this winter has been unfolding in Colorado, where the state legislature, with support from the governor and the largest utility in the state, has just passed two major new laws that will increase the state’s requirements for the use of renewable energy to among the highest in the country and shut down three of the state’s oldest and dirtiest coal plants. That’s one of the most promising themes in the West right now – a utility working with a governor to raise the bar even higher on using renewable energy sources. Western Resource Advocates, a long-time Hewlett grantee, led this work.

And Arizona, which has not been a leader on these issues, has now set one of the strongest energy efficiency targets in the West, coming close to what California, Washington, and Oregon have already done. Arizona’s effort was led by a longtime grantee of the Hewlett Foundation, the Southwest Energy Efficiency Project. It’s been quietly working on this issue throughout the Southwest for the past five or six years. We’re really starting to see the fruits of its hard work. Promoting energy efficiency may not be exciting – compared with developing a wind farm, for example – but it’s crucial.

In light of all you’ve described, what are some of the things Hewlett grantees will be working on in 2010?

Over the next three or four months, I expect they’ll continue to push very hard for national changes that create an economic consequence for emitting greenhouse gases. But recognizing that this gets harder with each passing month, our grantees and others in the field are weighing a variety of approaches to reach the same goal. They could pursue changes just within the electricity industry; they could advocate for renewable standards and for federal investment in green jobs and technology.

I expect we will see more work at the state level to increase the use of renewable energy as well as actions on a regional level to address climate change issues. There are always ways forward.