Prepared for the IIPS Symposium on

Globalization andJapan’s Science and Technology Strategy
19 – 20 November 2007
TokyoSession 3
Tuesday, 20 November 2007

Innovation Policies and Global Issues

Robert Cekuta
United States Embassy

INNOVATION POLICIES AND GLOBAL ISSUES
Remarks to the Institute for International Policy Studies (IIPS)
The World Order and a Vision of Japan in the 21 st Century
Globalization and Japan’s Science and Technology Strategy
November 19 – 20, 2007
Ambassador Okawara, fellow panelists, ladies and gentlemen –One of the key questions facing us today in terms of innovation and society is how wecan meet our needs for energy and also meet our needs to safeguard our environment.
The topic is front and center in the news. We saw it this past weekend with the release of
the IPCC [Intergovernmental Panel on Climate Change] Synthesis report. We will see itin the UN Climate Change Conference December 3 – 14 in Bali. Japan is talking aboutclimate change and energy being focal points of its upcoming G-8 presidency.
I would like to talk a bit today about how the U.S. government sees these upcoming
events and how technology can help mankind address the challenges of climate change,of other environmental problems, and the need for energy in meeting the demands ofpeople around the world for better lives.
Let me start with a basic point, climate change has been a top priority of the United States
government for years. Let me also go back to June 11, 2001 when President Bush stated:
“First, we know the surface temperature of the earth is warming…There is anatural greenhouse effect that contributes to warming…And the National
Academy of Sciences indicates that the increase is due in large part to humanactivity.”In the six years since the President made that statement – one of many he has made about
the seriousness with which the U.S. treats this issue – countries have continued to debate
how the world can and should address climate change. Scientists too have continued tolook at the evidence and improve their understanding, and that of policy makers andothers who need to act to meet the energy and climate change challenges. The IPCC
report issued this weekend, the Fourth Assessment, synthesizes the latest thinking. Ishould note as well that U.S. government funding for climate change sciences helpedwith a major part of the science included in the report – according to one USG estimate,
we are talking $12 billion in climate change science that has been funded by the U.S.
Federal government.
The U.S. Strategy1

The U.S. strategy looks both at the science and at the same time addresses climate change
in the broad context of how it affects people, including in terms of economies, standardsof living, and alleviating poverty. Energy is central to human economic activity. We
certainly see this in our developed industrial economies. However, developing
economies too need access to energy. Energy is not a luxury, but a key component ofdevelopment, of the sort of healthy, beneficial way of living people around the world
want, and indeed we talk about providing energy in the context of the internationallyagreed Millennium Development Goals. People in developing countries around theworld want to be able to light, heat, and cool their homes, but need electricity to do so.
And as we know, generating electricity with the technologies available today generallymeans generating greenhouse gas emissions.
The situation may be most dramatic in large, developing countries like China and India,
which are turning into the engines of economic growth of the 21st century. China
recently may have surpassed the U.S. in greenhouse gas emissions. Next fall, an Indian
car manufacturer is scheduled to introduce a “People’s Car” with a price tag of $2500.
Analysts predict the market for such a car could reach 300 million by 2020. With such anexplosion in the numbers of drivers, it is easy to see why it is the fast-growing developing
countries that will be the source of much of the growth in emissions in the coming
decades.
Renewables can help. Improved energy efficiency and greater conservation can help.
But we have to recognize coal, oil, and other sources of energy we know today, including
nuclear, will remain essential. So the question we in the U.S. and other countries want toanswer is: How do we move forward with an increased global use of energy, but do so inan environmentally responsible way?
I would suggest we need to employ a range of policies and other tools – conservation,
new technologies, renewables – if we are to develop and implement meaningful solutions.
So, when President Bush met with his fellow G-8 leaders this past June in Heiligendamm,
he presented a new strategy to help lead the way in developing a new framework on
climate change to succeed the Kyoto Protocol after it expires in 2012. Our strategy isbased on the successes we have achieved at home and includes a multi-part strategy.
The President’s Major Economies initiative, recognizing no one country can act alone tomeet the climate/energy/environment challenges, brings together the world’s major
consumers of energy and producers of greenhouse gas emissions for a series of meetings,
planned to culminate in a leaders meeting in 2008. The first of these meetings was in
Washington this past September and included high level representatives from 15
countries producing 80 percent of the world’s greenhouse gas emissions. Minister
Koumura represented Japan, one of his first acts as Japan’s new Foreign Minister – a stepon the part of the Japanese Government that we deeply appreciated.
Though these meetings, participants will develop a new approach to energy security andclimate change, contributing to a global agreement under the UN Framework Convention
on Climate Change by 2009. This approach will include establishing a long-term goal for2

reducing greenhouse gas emissions and a strong and transparent system for measuring
progress. The Initiative foresees each country designing its own strategy for achieving
this goal. We expect other countries, like the U.S., will find they need to rely on a mix ofmandatory, voluntary, and market-based policy tools. The difficulty Japan and manyothers are having reportedly in meeting their Kyoto Protocol commitments demonstrates
that there is no one-size-fits-all answer. We need to think creatively and learn from one
another’s experiences.
A second part of the strategy is to involve all of the participants in the U.N. Framework
Convention on Climate Change to see if we can develop a common agenda aroundseveral main areas: 1) sustainable land use through better forestry practices, better
agricultural practices, and better thinking through our cities; 2) increasing energy
efficiency; and 3) technology sharing to bring technologies from the developed world andhelp apply them in developing countries.
The third element is an accelerated program for advancing technology and its application.
The U.S. has already committed to boosting investment in advanced clean energytechnologies. In his State of the Union speech this year the President indicated that wewill put $179 million more into advanced bio-fuels and $650 million more into clean coal,
along with other technologies, as part of his $2.7 billion Advanced Energy Initiative.
Let’s look further at advancing clean energy technologies. By developing new, lowemission technologies, the world's major economies can help meet the growing demandfor energy while cutting air pollution and greenhouse gas emissions. For years, those
who worried about climate change and those who worried about energy security were on
opposite ends of the debate. But these challenges share a common solution: technology.
We have to recognize as well achieving the vision of an age of clean energy will
require significant investments from all major economies. Today, the United Statesand Japan fund most research and development of clean energy technologies. While
we hope others will do more to fund technology development, countries must also
work to make clean energy technologies more widely available by eliminating tariffand non-tariff barriers on clean energy goods and services. I would also note
President Bush has proposed the creation of a new international clean technology
fund to help developing nations harness the power of clean energy technologies.
Since the President took office, the federal government has invested nearly $18 billion toresearch, develop, and promote clean and efficient energy technologies and help get themto market. The private sector has responded with significant investments, ranging from
corporate research and development to the venture capital markets.
Since 2001, the United States has invested more than $2.5 billion to research and develop
clean coal. In addition, in partnership with other nations and the private sector, the U.S.
is moving closer to producing energy from the world's first zero emissions coal-fired
plant. As the efforts to build new power plants in China and elsewhere show, coal willremain an essential source of power for years to come. That fact does not mean weshould keep using our grandfathers’ coal-fired technologies, however.
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The United States is working as well to reduce barriers to new nuclear power plants in thecountry without compromising safety. Each year the world's 439 nuclear power plants
prevent the release of 2 billion additional tons of carbon dioxide in the atmosphere.
Nuclear power is the one existing source of energy that can generate massive amounts ofelectricity without causing any air pollution or greenhouse gas emissions. Japan has longplayed a key role in the safe development of nuclear power generation. In the U.S. thisfall, a company filed the first application since the 1970s to build new nuclear reactors.
Last year, the U.S. established the Global Nuclear Energy Partnership. This partnershipworks with countries with advanced civilian nuclear energy programs – such as France,
Japan, China, and Russia – to help developing countries obtain secure, cost-effective, andproliferation-resistant nuclear power. The U.S. has been joined by 15 partners, bothdeveloped and developing, in this partnership.
Since 2001, America has increased wind energy production by more than 300 percent andlaunched the Solar America initiative to lower the cost of solar power. Taken together,low-carbon technologies like wind and solar power have the potential to contributesignificantly to America’s electricity production.
Transportation, like power generation, is a major source of greenhouse gas emissions.
An age of clean energy also requires transforming how we fuel our cars and trucks. In
the U.S. we are working to develop the next generation of sustainable bio-fuels likecellulosic ethanol, made using everything from wood chips, to grasses, to agricultural
wastes.
The Administration is providing a Federal tax credit of up to $3,400 to encourage
Americans to buy fuel-efficient hybrid vehicles. Moreover, U.S. automakers areworking to develop plug-in hybrids that could be able to travel nearly 40 miles
without using a drop of gasoline. Having just been to the Tokyo Auto Show thismonth, I can attest that Japan’s car-buyers share this interest in new, greener
technology.
In the U.S. the Administration has spent more than $1.2 billion dollars over the past
five years to develop advanced hydrogen technologies and hydrogen-poweredvehicles that emit pure water instead of exhaust fumes. Moreover, the President's"Twenty in Ten" plan will help ensure cost-effective new technologies reach themarket. The plan aims to help cut U.S. gasoline consumption by as much as 20
percent in ten years by setting a new mandatory fuels standard that requires up to 35
billion gallons of renewable and other alternative fuels in 2017. It also looks toreform mandatory fuel economy standards for cars, as the Administration did forlight trucks.
Let me add another point, the U.S. government pays for a lot of research anddevelopment of new technologies. We often make that technology available to U.S.
manufacturers at very low cost. We are proposing to extend that policy globally, so thatAmericans who are producing new clean energy systems will make them available
globally, as long as other countries make the same commitment.
4All this work should provide our two countries with a platform for excellent cooperation
given Japan’s recognized role as a world leader in climate-friendly technology. Whether
it is the pioneering work done by Japanese automakers on hybrid cars, or Japan’s
leadership position in solar panel production, Japanese firms are developing technologies
that will prove vital to halting and then reversing the build-up of greenhouse gasses.
All this discussion about energy and greenhouse gases and the environment and the roleof technology thus comes back to the point that we need to think and work globally. TheU.S. wants to speed up the clock on the UN process. Instead of meeting in the once-peryear UNFCCC Conferences of the Parties, we should have an ongoing conversation thatin 18 months can reach agreement on the basic elements of the next climate framework.
We need to realize more actions in terms of developing and applying technologies ofconserving and using energy more efficiently and of reducing the amount of energy used
to produce a unit of GDP. We also have to gain broad acceptance of the fact that a "onesize fits all" approach to countries' greenhouse gas emissions won't bring the reductions
that we need. Instead governments, scientists, engineers, businesses, and civil society
need to come together and create a new conversation. And the product of thatconversation will be brought into the U.N. process with several years to go before Kyoto
expires.
The United States is often criticized for too much faith in technology. However our faithin human creativity and the application of those inventions, combined with financial
commitments and policies, is showing positive results. Our emissions performance since2000 is among the best in the world. According to the International Energy Agency,from 2000-2004, as our population increased and our economy grew by nearly 10%, U.S.
carbon dioxide emissions increased by only 1.7%.
In sum, we think what we have achieved in moderating the growth of emissions in theU.S. speaks volumes to the value of our approach. We believe discussions amongcountries who are the biggest emitters of greenhouse gases – especially on how totransfer and apply clean energy technology – can lead to genuine reductions in emissions
and real progress in combating climate change while helping afford the energy people
need, whether in developed, emerging market, or developing countries. I talk to mycounterparts in Japan's Ministry of Environment, Ministry of Foreign Affairs, andMinistry of Economy, Trade and Industry regularly about these very topics. There arecontinuing high-level consultations between the U.S. and Japan on climate change, theneed for energy, and the role of technology. All of us in the U.S. government hope forcontinued close coordination between Japan and the United States and our other key
partners as we proceed with our strategy this fall. These are global challenges and ourcountries have to work together to solve them.
Thank you.

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