REVISED: Press Briefing on the Third Intergovernmental Panel on Climate Change.

Report on Climate Change by Dr. Harlan Watson, U.S. Senior Climate Negotiator and Special Representative, U.S. Department of State, Jim Connaughton, Chairman, White House Council on Environmental Quality, and Stephen Eule, Director of the Climate Change Technology Program, U.S. Department of State

WASHINGTON -- Via Teleconference

6:13 A.M. EDT 

DR. WATSON: Just on a rundown for those of you who are not familiar with the IPCC working group three, this is the group that assesses the technological and economic aspects of the mitigation of climate change, primarily focused on reductions of greenhouse gas emissions.

This report involved several hundred scientists, engineers, economists from around the world, including a - probably on the order of 50 or so of those were U.S., and their job was to survey recent literature, recent (inaudible) over the last five years of all of the issues underlying mitigation of climate change. They have produced a huge report, which will be released - underlying report of over a thousand pages, which will be released, probably in about six weeks, after it's edited. And the focus of this meeting was the summary for policymakers - (inaudible) all of the very complex and detailed information in approximately 25 pages of text, including figures and diagrams, providing information that's relevant to the policymakers.

Again, the purpose of this exercise is not to make judgments, not to be prescriptive, but rather it provides a broad survey of options that are in the literature and provide, again, information on which policymakers can - on what the best knowledge is out there. This is the third in a series of reports, and this will be followed up by a later report this year.

I might highlight just a few of the findings, I think the most relevant. It first of all does a survey on where emissions have been over the last 30-plus years. It gives forecasts - or it gives a range of, again, drawing from the literature, a range of projections of where emissions might go over the next 25 to 50 years and even further out. And then a range of technologies, addresses a range of technologies over a broad range of sectors - transportation, electricity production, et cetera, all the way through agriculture, waste management - that might be coming on line that are either in the marketplace, here in the marketplace, or it might be in the research phase, it might be coming on line to address mitigation of greenhouse gases and gives a survey of the cost estimates of these various technologies or combinations of technologies; and also addresses the policy issues, areas of policy which, again, point back to the broad economic engineering literature of re-doing that and summarizing the various approaches that are being studied in the literature, itself.

I think one of the most important points that are being highlighted that, of course, the nations have grown and will be growing in a wide range, overall existence - scenarios, that some two-thirds to three-fourths of that growth is going to come from developing countries, primarily to the increase and (inaudible) for electricity generation inside of India that if we're indeed going to address climate change in the long run, we have to - (inaudible) -- growth in global emissions. And that we need to - the best way to do this is to do a broad portfolio of options across many, many sectors of - nations are growing in many sectors, there's no one sector which could be addressed, that would solve the problem, nor would any one technology - there is no silver bullet.

And there is also, I would suggest - also summarized there's a broad range of national policies and (inaudible) out there that would create greater incentive to (inaudible) technologies into the marketplace, voluntary regulatory financial incentives, et cetera.

I guess broadly I would say that in terms of the near-term options the focus, the most benefit obviously would come at the least cost, would come from energy efficiency improvement - things that are already in the marketplace or near the marketplace. Also, large opportunities in the area of renewables. But if we're really going to get at the issue, we have to develop, particularly more -- we need more nuclear, and particularly new clean coal technologies, and in particular, carbon capture storage.

I just might want to note that we view this report as really highlights again the importance of deploying a portfolio of energy technology globally, totally consistent with President Bush's approach to addressing climate change. And we have been leading the world in development, employing a wide range of technologies that is scientific and economic technical experts from around the globe that now agreed we can provide the solution to reducing emissions (inaudible) and economic growth.

I think with that I will stop and I will turn it over to Jim in Berlin; Jim Connaughton.

CHAIRMAN CONNAUGHTON: Thank you, Harlan. This is Jim Connaughton, Chairman of the White House Council on Environmental Quality. Again, I'm in Berlin, participating in the preliminary meetings leading up to the G8 summit, which Germany will be hosting in just a few short weeks, following a very successful U.S-EU summit that just transpired earlier this week, where we set out a very constructive agenda for action on energy security and climate.

I want to do two things. One is I just want to underscore the importance of today's IPPC report, it is probably the most substantial and most practical of the reports, in terms of reflecting five years of fairly dramatic new experience with technologies, with economics and with policy measures that are taking place around the globe, as the world orients itself towards sensible strategies to reduce emissions.

I also want to underscore the importance of the findings of the inter-linkage between energy security needs, clean development needs and climate change. This is a concept and a philosophy that has really emerged in the discussions over the last five years, and has been reflected in the leaders' statements by the G8 two years ago. It was reflected again in the recent U.S.-EU summit declaration. And it is now sort of becoming an accepted philosophy for a constructive path forward.

I'd also like to highlight two other reports that are being issued today. These reports are the submission by the United States - it's U.S. climate action report, which is a report that we provide periodically to the United Nations, describing our efforts - and, again, this would be over the last four to five years - and then also today is the federal - is the annual federal climate expenditures report to Congress, which outlines the more than $7 billion worth of programs just at the federal taxpayer level that we undertake each year to improve our energy security and help reduce the growth of greenhouse gases. I'll be happy to take any questions on either of those reports, as well.

The ultimate conclusion of the climate action report is through a wide range of policies that include regulatory mandates, incentives, technology partnerships, and international engagements. The U.S. is on track to meeting the President's goal of reducing greenhouse gas intensity our economy, 18 percent by 2012.

So thank you all and I look forward to your questions.

Q Thank you for doing this. At the risk of being a little presumptuous, I'm going to make this a two-part question. First, there - in the SPN you essentially have three different stabilization levels - the 590 to 710 PPM, the 535 to 590, and the 445 to 535, with a very large range in GDP reduction, depending on which one you choose. Which does the administration think is the most feasible one? Is there one that the administration thinks is unfeasible?

And then the other question is on Table SPM-3, when it talks about mitigation strategies that are currently available. Under energy, the second one it says point blank is switching from coal to gas, which is not exactly where the administration, the U.S. is going right now. How does the U.S. feel about - how does the U.S., I guess, reconcile what the IPCC is saying about that being a mitigation strategy and plan, both in the U.S. and China (inaudible) coal?

CHAIRMAN CONNAUGHTON: Let me speak in terms of a policymaker who would be the recipient of today's report. The report gives us scenarios, and so it gives us scenarios ranging from very aggressive strategies to stabilize a very low concentrations, to scenarios for how you might take a little more time that may result in a higher concentration, all oriented towards stabilizing greenhouse gas in the atmosphere. So the usefulness of the report is to let us assess the relative timeframes and costs of those various strategies.

So you gave a few examples of what we see as a broad range. There are measures that are recommended that can come at relatively little economic cost and produce potentially significant economic and health benefit. So this would be measures such as efficiency, or measures that work to control air pollution that you can quantify the harms of, that also produce climate benefits.

On the other hand, there are measures that come currently at an extremely high cost because of the lack of available technology. For example, the technology for producing power from coal with no emissions is much more expensive than anyone can afford right now. So if you pursued that as a policy strategy, you'd have to understand the expense of that. And so you see ranges - you know, GDP ranges as high as 3 percent to achieve certain scenarios - well, that would, of course, cause a global recession, so that is something that we probably want to avoid.

On the second part of your question, then, the report is very useful to give you a scenario such as stopping the use of coal and switching to natural gas and what that would mean from a greenhouse gas perspective, it's also then important to understand what that would mean from an energy security and economic perspective. So while switching to natural gas may be one path, the challenge of that is coal is very affordable, it is also a highly secure energy resource. And if the world switched overnight to natural gas, natural gas prices would go through the roof because of the lack of available supply, and that would create a huge negative impact on jobs and human welfare.

So what's instructive about the report is to look at some of these options, see what the cost profiles are and figure out how to create a balanced portfolio of strategies for advancing technology. And certainly it's important - China will use its coal to develop, the United States will use its coal as part of our overall energy profile. We need to find a pathway to make coal very low emission, and the United States is leading the world in that effort with a multi-billion dollar program to make that technology happen.

Q So to follow up, you're saying that the 445 to 535, which specifically mentions a range of GDP reduction greater than 3 percent - that is what you're saying is something that it would cause a global recession and something we'd probably avoid - that scenario with the 445 to 535 stabilization level?

CHAIRMAN CONNAUGHTON: That's an accurate description of that scenario. Again, I want to differentiate between what is happening, what will happen and these various scenarios for what might happen. And certainly there is no leader in the world that is going to be pursuing a strategy that would drive their economies into a deep recession. I think the leaders of the world are focused on strategies that grow economies, that pay for these technologies that make the solution possible.

Q I guess I'm just trying to translate that. In other words, you're not aiming for that 445 level there - you're more aiming toward the other level?

MODERATOR: We'll take another question at this point. Thank you so much. Next question, please.

Q Good morning, gentlemen. With all the concern over China and India, I guess why not aggressively negotiate with them on this issue, outside of any regular efforts, like the Asia Pacific partnership or any annual energy dialogue?

CHAIRMAN CONNAUGHTON: We are actually working very closely with them inside the Asia Pacific partnership and have actually very constructive engagement, where we've broken the problem down into core sectors focusing on power, focusing on energy intensive industries like steel and aluminum and cement production, and even focusing on day to day issues like buildings and appliances. We have found this is a very effective approach for sharing technology experience, as well as sharing policy experience in how to make forward progress.

Q (Inaudible.)

CHAIRMAN CONNAUGHTON: Harlan, do you want me to take that, or do you want it?

DR. WATSON: Well, I couldn't understand or hear the question, Jim.

CHAIRMAN CONNAUGHTON: Okay, I think I got it. Again, the report lays out different scenarios for achieving different concentrations at different points in time. I think the main - the questioner has pointed to the fact that the report underscores the importance of a strong curve of slowing the growth of emissions, stopping them and then reversing them.

I think what we're given is the fact that you have the developed world responsible for the majority of emissions today. You have the developing world, the major emerging economies who represent most of the growth of emissions in the coming decade or so and it underscores the need for collective action, it underscores the need for action across all sectors of the economy and it underscores the very compelling need that in order to reach some of these scenarios - such as the one the questioner laid out - we're going to have to work on some breakthrough technologies, especially in the area of fossil fuel power generation, as well the area of fuels.

The United States, just for example on fuels, is committed to one of the most ambitious programs of replacing gasoline with alternative fuels - mainly renewables - that will have a significant impact on reducing the emissions associated with motor vehicle use. That's just one of what would be dozens of examples of work that we have to undertake together as we look beyond 2012, which is when Kyoto ends. But I would note that work is occurring now; so we're not waiting until 2012 to act, those discussions are underway and those actions and investments are occurring even as we speak.

Q Given the emphasis that you just placed in the opening remarks, Dr. Watson, on carbon capture and sequestration, I'm curious why haven't we initiated more pilot projects that try to do this sort of thing already? It's been clear for the last few years that this is big technology. As far as I'm aware, there's only a few efforts underway - shouldn't there much more being poured into this right now?

DR. WATSON: Well, certainly we're pursuing it on several fronts. First of all, through the U.S. Department of Energy we're pursuing a broad range of carbon capture and storage activities, including FutureGen - and, in fact, I'm going to let Steve Eule, the Director of the Climate Change Technology program, talk about some work there.

DIRECTOR EULE: Yes, I'd be happy to. The Department of Energy has initiated seven carbon sequestration regional partnerships, these involve about 240 organizations, spanning about 40 states. And we're looking at a number of things. We're looking at - in those partnerships we're looking at where would be the appropriate geological formations to store the carbon, what would be the regulatory issues that would have to be addressed in order to make it work. That was phase one.

We're right now at phase two, where we're doing about 20 pilot projects. And we hope to move to phase three in fiscal year '08 and undertake some large-scale demonstration projects on the order of about a million tons a year.

So this thing is moving in phases, and we're investing quite a bit of money in it and we think that this - what we're learning through these pilot projects and through these other demonstrations will certainly have an impact on the FutureGen project, which is going to be the near-zero-emission coal-fired power plant and hydrogen production plant that will incorporate carbon sequestration technologies into it -

Q So it will make -

DIRECTOR EULE: So we have a plan that's in place and we're moving forward.

Q So how many holes in the ground right now? I mean -

DIRECTOR EULE: How many holes in the ground?

Q Yes.

DIRECTOR EULE: Let me give you the larger picture, in terms of projects and budgets. The current - our current carbon sequestration is aiming to about 20 or more projects across the nation within the next three years, with a public expenditure of about $200 million, which is matched by the private sector in roughly equal amounts. So this is a very significant public-private partnership.

The FutureGen project will be more than a billion dollars, also divided between the public sector and the private sector, which is why, you know, how these things work. At the same time, just this year we released $1 billion in tax credits, which together with another $650 million in tax credits this year will leverage in excess of $10 billion of private investment to build the kinds of coal-fired facilities that may make carbon capture possible. So there's a multi-billion dollar effort there and that could be anywhere from - you know, currently it's nine projects have been proposed, and we hope it will get up to 12 or 15 projects. That's just in the U.S.

In addition, DOE is partnering with a few utilities, one of them is a southern company, and they're building some of the - you know, in a grant basis, I think it's a $500 million project, building one of these plants in Florida. That's just the U.S.

And then the European Union, as part of their new energy strategy, in close consultation with us over the last year-and-a-half, they have committed to the construction of 12 advanced facilities by 2015, and they are going to be increasing their budget expenditures on carbon capture and storage, as well. And then we are looking forward in future discussions with China, and hopefully with India, to see if both of those countries, who are heavily reliant on coal, can make similar investments.

We are going from virtually no - you know, very limited, a few million dollars investment in this subject back in 2000, and very little conversation on the subject back in 2000, to worldwide understanding that we've got to solve the carbon capture and coal issue and we've got to solve it fast. And I think the dramatic ramp up in both budget, scientific work and construction, actual construction, is a sign of the seriousness of global engagement on this issue.

Q Thanks for the presentation. Talking to economists about the (inaudible) on GDP, one of the things they say is that, (inaudible) figure, for example, is over a 20-year period. So their, sort of, bottom line view is that getting richer slightly slower - (inaudible) - what's wrong with that, or what's the problem with that?

DR. WATSON: Well, I think, you know, who's getting richer and at what pace and who's not getting richer at what pace - and so, you know - well, I'll just leave it at that. You know, there's basically, you know, a society trade-off on that. You have to realize, once again, that these are very stylized, idealized economic modelings they do assuming a lot of perfection out there - they're assuming that we can bring on line technologies which are currently very expensive now and we're working very hard to get their costs down so they can become cost competitive and enter the marketplace. They're assuming that's going to happen in a certain point of time. And, of course, we hope that happens; we're investing a lot of funds trying to make that happen, but in the real world it doesn't always turn out that way.

And so, once again, these are very stylized, idealized models. It gives you - it helps inform the policymaker on direction, but you know, you have to deal with those - again, those trends and so on, taking those trends, and you obviously can't take those as perfect predictions and predictors of what might happen in the future. First, they don't present them to be anything except stylized models to give you a sense of the trend and the trade-offs that you might get among the different technologies.

CHAIRMAN CONNAUGHTON: And I would add, what's important - the report makes clear there are some opportunities that are at hand, such as efficiency, that really can be achieved and add to economic growth and social welfare. There are other approaches that are on the horizon that are currently excessively costly if you were to try to impose them on an economy today. And that does have - as policymakers we have to be concerned about the real world impacts of that, not the theoretical, macroeconomic issues of that.

If you have poor consumers in urban environments who see 20 or 30 percent increases in their electricity bills, that has significant social consequences. If you see energy intensive manufacturing operations seeing a significant increase in their energy bills, that could force them to shut down or move their location to other regions of the world that have cheaper energy.

So those create very real local impacts that policymakers have to think through before they select policies that would cause such impacts. So that's not to take away from the fact that over time, as we grow our economies, we will be wealthier as a world, which means we can afford these technologies as they come on line and we bring the cost down. So this is a dynamic opportunity and we just have to be sensitive to its interim impacts, in terms of energy costs, job losses and, sort of, forced shuttering of work in one location in order to open it up someplace else and simply moving emissions around. Our goal is reducing emissions and growing economies. And we'll take the information from the report to make sound judgments in order to achieve those two objectives.

Q Quick follow up. What's the sense in Europe, or what's the view in Europe and developing countries as to how fast CCS can come on line?

CHAIRMAN CONNAUGHTON: How fast carbon capture and storage?

Q Correct. Sorry, carbon capture and storage.

CHAIRMAN CONNAUGHTON: I guess - Steve, why don't you speak to that, what the (inaudible) are, and then I'll pitch in on top.

DIRECTOR EULE: What -

CHAIRMAN CONNAUGHTON: How fast can carbon capture and storage come on line?

DIRECTOR EULE: It depends on the scenarios that are used, but most people probably don't think it will be widely available before 2020 to 2030 timeframe, depending on the model.

CHAIRMAN CONNAUGHTON: And I would note that's because we are now aggressively going after it, which is important. So if we continue to see the increased interest - especially if China and India join in on the technology development effort - we can hope to achieve that kind of a timeframe, which is important, because obviously their coal use is going up dramatically - Central and Eastern Europe and Russia, their coal use is going to go up significantly. We need this technology if we want to continue to provide affordable energy through coal, while reducing air pollution and greenhouse gases.

DIRECTOR EULE: If I could just add, you know, the cost of carbon capture and storage is very, very high at this point. The goal at the Department of Energy is to reduce that cost to the point where, combined with things like energy efficiency, it wouldn't add more than 10 percent to the cost of electricity. That's very, very aggressive technology, but it's one we're working hard to achieve.

Q Thank you very much for doing this. I wonder if we could sort of look at this from sort of the atmosphere's perspective at the moment. It seems to me that, at least the summary, as you folks have pointed out, gives us a range of concentration of possibilities, I guess. Given what at least some folks think are sort of the dangerous thresholds, the two to three degrees, and the concentrations required to get there by a specific period of time in order to avoid sort of the worst effects - what is the administration's sense of a reasonable atmospheric level? And how consistent is greenhouse gas efficiency - how consistent is that approach, in terms of getting there? I realize that every bit helps, but even with efficiency, even with improvements in efficiency, you're still pumping this long (inaudible) gas into the atmosphere.

CHAIRMAN CONNAUGHTON: I'll take the back end of the question and then turn over the other piece back to Harlan.

The practical fact is that the first step in any enterprise is to slow the growth of what you're doing. That's what we did on air pollution back in the '70s. Greenhouse gases are rising and you have to slow that down, and so efficiency is a very good measure to figure out whether you're slowing it down in a way that's consistent with growing an economy, and whether you're slowing it down and actually getting real reductions. And let me explain that.

We can get reductions by putting people out of work - that's not very viable and I don't think people feel they're better off if they're being put out of work to reduce emissions. We could reduce emissions by moving energy-intensive activities from America to another country that doesn't have a similar commitment on greenhouse cases. That creates the job loss, but it also probably leads to an increase in greenhouse gases someplace else. So efficiency is a very good way of judging strategies that are producing real investments in technology that are producing real reductions in the growth context. So it's just a tool.

Over time, emissions will stop. And it's still useful, though, to understand are you stopping a more efficient output. And then over time, the emissions will decrease. And, again, efficiency is a good way to understand the approaches that are causing decreases in emissions that are valuable versus, again, economic losses or other approaches that are not favored.

So they're perfectly consistent, you just have to look at absolute measures on the one hand, to see how you're doing, and then look at efficiency on the other hand to see are you doing it right. And that's why you'd need to look at both.

Harlan, do you want to speak to the - generally to the concentration issue and how that - you know, the open question on how we can think about that?

DR. WATSON: Well, I mean, certainly as he said, in the report there are a broad range of concentration levels being looked at. And, of course, a range of climate models which then take those ranges of concentration and translate them into, you know, various ranges of temperatures.

One of the problems is, of course, A, we don't know how the concentration level (inaudible) the temperature the well. There is still a lot of uncertainty in that. We're also using a rather crude (inaudible) -- talking about atmosphere, average global atmospheric temperature changes, and that doesn't really mean - what you're really concerned about are the impacts on a regional level, or at least at the regional level and sometimes even a smaller grid than that. And we simply are not - we're simply not there yet, in terms of scientific ability to do that, and that's one of the reasons we're (inaudible) climate change science. Our effort is something on the order of nearly -- as much as $2 billion in some years, because there's a lot of unknown on how to do that.

We say - and I say most of the - at least the people that I've talked to have been - (inaudible) - having the ability to get down to the recent level is probably going to be at least five years down the road - (inaudible) - emphasis in the scientific community and increasing amount of research, and I think we're going to see a great explosion, actually, of literature coming out in the next few years on how to get to grips with this regional issue, regional impact. And then I think we'll know - have a lot better understanding, much better than where we are now on what that means in terms of specific concentration levels.

CHAIRMAN CONNAUGHTON: Let me put it from the perspective of policymaker. Just as we see current geo-political risks as justifying strengthened action to reduce our dependence on foreign oil, the report today underscores undertaking a strengthened action to reduce greenhouse gases. We can do that in combination.

The President's State of the Union commitment to replace gasoline use by 20 percent in the next 10 years is a good example of an aggressive level of ambition. And you're seeing countries around the world looking at that kind of an approach themselves.

So you can look at all these ranges, you can look at all these timelines - what it gets down to for a policymaker is we are and will be taking the next steps (inaudible) action. And at least for the U.S., we've begun that process already through the State of the Union and other initiatives.

Q I wanted to get back to the concentration levels. I know it's been hammered out quite a bit. But, Harlan Watson, I think if I understood correctly you said that it's not clear, the link - there's still uncertainty surrounding the link between concentration of gases and the associated temperature change. But working group one of the IPCC you said it's likely that climate sensitivity is in the range of two to four-point-five degrees, with a best estimate of three degrees, and it's very unlikely to be less than one-point-five degrees. So there is a certain degree of uncertainty there. So I guess the question is, the EU has said that to aim for this two degree temperature target, we should be aiming for 450 PTM. And I find it strange the U.S. doesn't have an idea of what sort of concentration of greenhouse gases we should be aiming for.

DR. WATSON: You have to realize that, of course, concentrations and emissions are two different things. If the United States, for example, reduces emissions to zero, concentration levels are still going to be growing, simply because we have to (inaudible) ability, we would have to have as much (inaudible) gases coming out of the atmosphere through absorption in the oceans or in trees and forests as are produced globally.

So in terms of what emissions levels or what concentration level we were globally, you know, again, that's totally unclear. Now, you - again, you mention the broad range, and that's the state of the science now - A, the broad range of what this particular concentration level translates into what temperature - and, again, we talk about global mean temperatures as opposed to what's relevant to, I would say to any policymaker and what does it mean for - what does it mean where I live. And so, once again, you have a broad range of uncertainties, of which we're working very hard and funding science to try to narrow those differences. The point is, we do see the necessity of reducing our emissions, which we're doing. And, of course, Jim talked about a lot of the activities that we are doing.

CHAIRMAN CONNAUGHTON: I would note, again from a policymakers perspective, what the U.S. tends to do is focus on more practical goals - amounts of emissions, or, for example, amounts of renewable fuel over a period of time that we'd like to see. And then we design a program and then figure out what it is that we can achieve and then set the goal based on that.

And so while these debates over temperature levels and these discussions over concentration levels are very useful guides, as the questioner suggests, in terms of ranges, as policymakers we still have to translate that into the kinds of objectives that people can take action in relation to. In America, culturally, our people are just much more responsive - tell me how much I need to achieve in a particular sector by when. And so we tend to focus very specifically on specific outcomes. Other countries are more readily in - the EU, in particular, for example, you know, likes to set these outer goals that do not have programs associated with them. But in practical terms, the EU ends up doing what the U.S. does - the EU ends up setting sector based objectives, like they did in the recent energy plan, and you know, the broad goal is effectively untethered, it's unrelated to the more specific goals, but they use it as a guide to motivate action. People in America are motivated to action, they're just looking for concrete programs to deliver concrete results.

Q So what I want to know is, when you set these concrete programs, you don't have any specific emissions levels -- not emissions, atmospheric concentration levels in mind?

CHAIRMAN CONNAUGHTON: We stick with the goal of -- the overarching goal, which is to stabilize greenhouse gases in the atmosphere at a level to prevent dangerous anthropogenic interference. That is a guidepost that has actually guided our actions, really, since 1992. As a guidepost, that is as effective a guidepost as picking a temperature number or picking a concentration number, because when you translated the policy, you still have to sit down and say, what is reasonably achievable in each sector over a given period of time. So the urgency is clear, the need for strengthened action is clear, and I think you're seeing that translate into policy.

I think the more interesting place to look is, what ranges of policies are being implemented, and how are they working. That, to me, is one of the most interesting pieces of what will be the larger report later this year, which is showing how different market-based instruments work or don't work in different national circumstances. In America we have strict fuel economy regulations, in Europe you have high taxes on fuel. What are the relative advantages of those two approaches in advancing fuel economy? These are the very questions that are before us, and it's a very exciting time to be doing policy in this area.

MODERATOR: We have time for one last question.

Q There's been a lot of emphasis on nuclear energy as one of the solutions. And I'd like to know how much, in terms of U.S. government policy, other sources, like solar energy, are being explored? And this is something Mr. Eule may jump in on this. Also, I'm wondering, the technologies for -- if nuclear energy does become more and more (inaudible), what are the technologies for storing the nuclear waste? Thank you.

CHAIRMAN CONNAUGHTON: Steve Eule, I'm going to take the nuclear question, but I think it would be great if you could then describe the advanced energy initiative on solar and the other renewables.

On nuclear, it is now well understood by policymakers that if you, in fact, intend to be serious about climate change and reducing greenhouse gases, you have to be serious about a significant expansion of the world's use of zero-emission nuclear energy. That is a technology that is proven, it is safe, it is reliable in the countries that have the capacity to use that source of energy, and those that do have the capacity to use the energy have an obligation to do so if we want to take a nice dent out of the growth of greenhouse gases.

Now, it's not the only technology. So the question, you're correct -- right now, I think it's not well known, Europe and the United States each have -- I guess the United States has about 6 percent of its energy in renewables now. I actually think Europe is less than that. In Germany, where I am right now, Germany has about 6 percent renewables. And so we are the two countries that are leading the way in actually building renewable energy that's actually providing electricity to people. And that's increasing dramatically in Germany and in the United States, and elsewhere around the world.

But for the moment, and actually in the near future, that will be a small piece of the overall energy mix. And so the challenge on nuclear waste is with a growing and technologically advancing civilian nuclear energy sector, we will perfect the technologies that allow us to recycle the spent fuel as much as we can and reuse it, and then what's left, we are aggressively working on the technologies that will make what is left relatively benign.

It is the case that we can store what is left safely, and with a tiny, tiny, tiny, tiny geographic footprint, especially if you compare it to you the hazardous waste sites around the world for municipal waste and other material, or when you compare it to other waste storage related to municipal water treatment and other things.

So when it comes to nuclear, the waste can be safely managed, you just need the political will to do so, and that's clearly -- clearly, the political landscape is changing significantly around the world because of this renewed focus on energy security, and this renewed focus on wanting greater alliance on zero-emission sources.

Steve, why don't you talk about the advanced energy initiative.

DIRECTOR EULE: I'd be happy to, Jim. Any aspects of the advanced energy initiative are in a climate change technology program, which is headed up by the Department of Energy, includes 10 federal agencies. We have already a portfolio of about $3 billion a year. It covers a broad range of technologies. And in the advanced energy initiative, the President was looking at ways that we could alter the way we fire our homes, automobiles and businesses within about 20 years.

And in his FY08 budget, we requested about a 26 percent increase in the technologies under the advanced energy initiative. And they include such things as the (inaudible) America initiative, the biofuels initiative. And in the biofuels area, for example, it's going to be very important to support the President's 20 in 10 proposal. And recently we announced the $385 million for six new (inaudible) refining plants that could produce as much as 130 million gallons of clean ethanol.

This budget also includes over $300 million for the President's hydrogen initiative. He announced that initiative in the State of the Union address in 2002. He pledged $1.2 billion for that initiative in this year's budget to fulfill that commitment.

We're also taking a look at advanced batteries. And I mentioned earlier the near zero emissions coal fired power plant, the FutureGen project. And of course, we're taking a look at nuclear power, in our nuclear 20 in 10 program, and looking at (inaudible) and siding issues, and we're happy to learn that the Nuclear Regulatory Commission recently announced two early site permits for nuclear power plants.

We're not only looking at developing the technology, but we're looking at ways we can get these out into the marketplace and accelerate the pace.

CHAIRMAN CONNOUGHTON: If you do get a hold of the climate expenditures report, you'll see just in 2007 alone -- so just this year, on the tax side, we are going to have $1.7 billion of favorable tax treatments, in the form of tax credits and other incentives, that will go -- that will get these emerging technologies actually into the marketplace. It's one thing to perfect them (inaudible), it's another thing to get consumers to buy them.

So all told, on efficiency and renewable power technologies, you're looking at about $1.7 billion just this year alone. No country comes close in its assistance in this regard.

Q Are those reports available online, the two that you mentioned?

MODERATOR: They are available at www.state.gov. That's where the Climate Action Report is, and there's also a media note related to the IPCC report that will be available under issues on the State Department website.

Q Okay, thank you very much.

MODERATOR: Thanks very much. That concludes the call at this time.

END 7:04 A.M. EDT

Correction: "Press Briefing on the Third *Intergovernmental* Panel on Climate Change Report on Climate Change