U.S. Environmental Regulation After the Paris Climate Talks

Following the Paris climate talks, Gina McCarthy, administrator of the U.S. Environmental Protection Agency (EPA), joins the Wall Street Journal's John C. Bussey to assess the domestic and international implications of the agreement, and the future of U.S. climate policy and diplomacy. McCarthy discusses the U.S. diplomatic efforts behind the agreement reached at the 21st Conference of the Parties (COP21) meeting in Paris. She attributes the success of COP21 to U.S. leadership in climate diplomacy. McCarthy goes on to outline the challenges and opportunities facing the EPA, and the future of environmental policy in the United States.

BUSSEY: Well, welcome, everybody. Thanks for coming out. I’m delighted—my name is John Bussey. I’m delighted to be here for The Wall Street Journal. I’ll be talking with Gina McCarthy the administrator of the EPA today.

Here’s how the program will play out. We’ll hear a few words from the administrator to begin with, and then we’re going to talk for, you know, 10 or 15 minutes. Then I’d like to turn it over to questions and answers from you. That’s always the most interesting part, I think, for any of these gatherings at the Council.

We have a few members of the press in the back. I will be diligent in getting to you as well. Don’t be offended at all if I lean a little bit more toward the members in picking them first to ask their questions. But we’ll try to get everybody’s—we’ll try to get everybody’s questions answered.

I think we’re just as a fascinating moment in the environmental discussion and debate. The Paris conference was, at a minimum, quite notable, many say historic, some say a little bit more controversial in issues of implementation that still need to be resolved, but fascinating no matter how you look at it. Gina McCarthy’s going to be here to explain to us what exactly happened and what needs to happen now.

This is going to be on the record. So if you just kind of keep that in mind when you’re asking your questions. And if you could mute your cellphones from the outset, that would be very helpful. And now, I’d like to turn this over to Gina McCarthy. Please join me in welcoming her. (Applause.)

MCCARTHY: Hello, everyone. Happy new year. It’s great to be back again. John, thank you for the introduction. I expect we’re going to have a great conversation. And I want to thank the Council on Foreign Relations for inviting me here and for hosting the event. I know that ’25 (sic), at least, in many people’s views including my own, will go down in history as quite a year. It was a year where we began significantly to turn the tide on climate change. And there is no doubt, I think, in my mind and in many others that that’s the case. And I’m also convinced that 2016 is not going to be a year where we’re going to slow down. It is a year where we are going to keep building the momentum on the basis of the historic year that’s gone past.

So last August the president announced our clean power plan at EPA. And it’s a historic rule to cut domestic carbon pollution from our power plants. The reason why I’m mentioning this in an international discussion is because last month in Paris, where nearly 200 countries came together to announce a universal agreement on climate that I think is groundbreaking, the clean power plan was one of the foundational issues that was brought up that allowed that success to happen. Now, I am not saying that just because I want to give kudos to EPA, although we did a great job. It was certainly a concerted effort. But it was also a concerted effort to take a look at where the energy world and this country is heading, and to work with those in the energy world that are both producing the energy, that are using the energy, and those that are regulating it. And it was an opportunity for us to show domestic leadership.

And so the task really as to why it was successful as opposed to alluding us like it has for the past years was really a result of three things. And we can get into these in much more detail when we talk, but I’d like to hit them a little bit. First of all, I think it was—and the inevitability of taking climate action was quite clear. We did not hear from climate deniers at this meeting. We did not hear any country saying that actions shouldn’t move forward. There was a certainty about the inevitability of needing to act on climate and the immediacy of that need that was quite palpable and very different.

Secondly, it was about U.S. leadership. And I can get into this a little bit more, but it was both the president’s leadership not just in setting an aggressive domestic environmental agenda, but in his constant nurturing of this issue over the past few years, so we went into Paris fully prepared for a deal, and his work while we were in Paris. And it’s also the work across the administration. It put U.S. back in a leadership position in a way that we have not been for quite some time. And it allowed us to speak with a credibility and an energy that we hadn’t seen before.

So if you look at these issues, why do I know that there was certainty of action? When I went to Paris, it was markedly different than any COP that I had ever been to, and I’ve been to many—many of which I would rather have been home doing Christmas present shopping than being there. It was—it was a positive level of energy that I don’t think any of us had felt before. There was a collective motivation to come to a decision point here that would really finally address an international effort that was commensurate with the challenge that we were facing.

Now, I spent a full week in Paris. Many thought I shouldn’t or that was a long time. It proved to be a valuable opportunity for me because I got to listen to that energy level, I got to talk to many countries, I got to talk about in detail some of the issues relative to how you do a transparent system. How has EPA done this similarly before with countries, and helped with that capacity-building exercise? I also saw that there was a big difference in the way this meeting was handled. First of all, we went into there with already 180 countries pledging commitments. That has not happened before. And so when we stepped off the plane, it was different. We had in prior years had the world leaders come at the end of the meeting instead of the beginning. This time, it was the beginning. What that did was two things.

One is it allowed us to recognize the work that had already been done in the past year by this president and others to get the largest world leaders and world economies to the table in a serious way. But it also charted the course that the rest of us needed to follow. That meant that every day after that was substantive instead of a preliminary discussion prior to the world leaders speaking. It was a vastly different way of structuring this meeting, and it resulted in vastly more substantive discussion, which shows in the language of the agreement. Now, the other thing that became very clear, as I’ve said before, was the leadership of the United States, and the fact that we were not just at the table, but we were managing many of those discussions and putting them forward.

We know that president Obama made a big difference when he reached agreement with countries like China, and with Brazil, and when he had such rigorous conversations with India. I know in talking to all of those folks at the table that their job was to get an agreement. Their job was to make good on those discussions, and it showed. I also know that one of the challenges I had going in there was to make sure that I could articulate the domestic agenda effectively. Well, one of the things I wanted to make sure that I talked about was our clean power plan. Well, it turned out that I needed to do a lot less talking than I thought because I had the utilities there doing that talking. That is quite a change.

They were the ones talking about their ability to meet this, its consistency with the way in which investment is happening in the U.S., and how this is the direction that we need to take in order to get investment once again in our energy infrastructure so that we can meet the challenges of today and tomorrow. There was private sectors beyond the utilities that were already on board in making pronouncements, including investments communities. This was an opportunity for us to double the research capacity funding that we would make available from governments, but also to have the private sector stand up and announce opportunities for investments in new technology because, while this is a great agreement that we fully expect to produce terrific results, we know that a lot more needs to be done. We know more solutions need to be driven to the table.

And the right people were around the table saying the only way we’re going to get those investments is to get an agreement, is to keep moving forward, is to find an interagency or international way I which we could work together to identify those new technologies, to align those research efforts, and to figure out how developed and developing countries could take advantage of that, not just to address climate, but to address the multitude of environmental and economic challenges that face them, and integrate climate into those efforts moving forward.

So it was a wonderful meeting. I think I should stop there, since I’m at my time limit. I think we should just take some questions, but I’m happy to talk in detail about this. But 2016 will really be for EPA a tremendous opportunity to move forward to continue with our commitments under the president’s climate action plan to implement the clean power plan, which we can talk about. But we are also going to have a heavy role supporting State in working on issues to bring this, the kind of detail that you’re suggesting, to the table to make sure that this agreement is cast in stone, the extent that we can, and provides that positive momentum moving forward.

We are quite sure that we will meet the president’s commitment domestically to move forward on issues like our heavy-duty vehicle rule, HFCs, methane rules. We have a series of work that’s going to continue, but we are not going to take the ball—our eyes off the ball of sharing our expertise in supporting this international effort which, for the first time, has a framing that could make it very successful. And we intend to get it there. So thanks very much, everybody. (Applause.)

Should I wear this on my head? (Laughter.)

BUSSEY: Well, thank you. So, I think that there’s been universal acclaim for this many countries agreeing on anything, and that the headline numbers have been pretty positive. But the criticism has been that the details are yet to be hammered out, enforcement. How do you get there? How do you get to this goal to limiting temperature change to 2 degrees Celsius, or less? Now, you certainly were part of discussions that got into those details. Walk us through step by step, how does this now happen?

MCCARTHY: Yeah. Well, for those of the—for those folks that may have these concerns, I don’t know whether I’d call them criticisms. There are limitations of what you can get done in an international agreement. But this agreement is much more specific in terms of how it must be carried out. It talks about coming back every five years to take a look at goals and that every goal needs to be more aggressive than the one before. It outlines a new capacity-building effort that I’m really engaged and interested in, which is to make sure that developing countries can do the kind of work that provides that accountability and transparency and will provide opportunities for them.

BUSSEY: Not just energy capacity, but the intellectual capacity.

MCCARTHY: That’s exactly right. And the technical capacity. You know, and so what this actually does is it basically says that every country is going to have to meet standards that look at providing a transparent accountability system. Now, anyone who’s done international work knows that accountability is a big thing. Transparency is a big thing, because it’s often the key driver to getting countries to do what they’re supposed to do. Most countries hate to be the one that didn’t meet the goals that they articulated. And that is a huge driver when you get into the international world.

And so what EPA does, and what we were doing at the conference and the convention, is to basically outline what those steps might look like, and why they’re not just a measure of accountability, but why it’s smart for developed and developing countries to do that. And it’s exactly the same process that EPA has gone through with states in implementing our national ambient air quality standards. It’s the same thing that we’ve been working on with China on how you begin to address their air quality challenges. It’s not complicated.

Basically, it takes technical capacity, but the first thing you do is you do an inventory of where your greenhouse gases are coming from. It’s amazing how bad we are at estimating that before we look at it. And every country’s the same. We’ve done this with China. We’ve taught them how to do inventories. And it never matches up where they think their emissions are coming from because we all have a bias on where the bad things are and what the good things are. That’s why for a long time we have to keep telling people that cars matter. It’s not just the utilities, you know, because people just think things.

So you do an inventory, you look at what actions you take, this is what every state does when they’re implementing a national ambient air quality standard, when they’re out of attainment—do inventories, look at a range of actions, measure what those—analytically measure what those might have as an impact, and then chart your path forward. And then ever year you look at reconciling that, or every two years. That’s exactly what this is all about.

BUSSEY: Was that process reflected in the background documentation of the agreement, or?

MCCARTHY: It’s in the agreement itself, and in the background. And the agreement itself says—

BUSSEY: Here’s what I’m going to do, is—

MCCARTHY: —that every two years every country is going to do a report that monitors their success. And to do that report, you have to provide—you have to follow guidelines that the IPCC has developed. And those guidelines say, what’s a good inventory? How do you do this? The challenge for EPA is going to be continuing to work with other countries to expand the capacity of the developing countries to be able to do this well. We have actually spent a great deal of time in China doing this. We have actually detailed folks working with State to different countries to actually embed people there who can teach this, to get professional expertise there.

And my job was to explain—when I was there, at least, the job I took on was to explain to countries that this isn’t punishment, this is opportunities here because if you can’t say where your greenhouse gases are coming from, you are not going to be a market for technologies that can address them. You are not going to be able to articulate where your research needs are for all of the research dollars that have been just committed. It is a foundation for them to be able to put their hand up and get the assistance they need, as well as develop a plan that just might be consistent with where their economy needs to head, which is—which is, I think essential.

And for countries like China and India and others, where we now have monitors that look at air quality and recognize the problems they face, for them this is their opportunity to look at not just greenhouse gas reductions but efforts to reduce those that can also have co-benefits, that have direct public health benefits.

BUSSEY: And growth benefits.

MCCARTHY: That’s exactly right.

BUSSEY: You’ve made—this is the argument you were making, right, that business is leaving Beijing because you can’t breathe the air, which isn’t good for business and growth in China. But at the end of the day, is it naming and shaming? I mean, this is, after all, a lot of countries with very disparate objectives, personal objectives. And it’s hard to get agreement in even a smaller group. At the end of the day, is the naming and shaming process that’s going to happen every two, five years in those meetings that happen, is that the—is that the stick that the agreement has?

MCCARTHY: No, I—the agreement isn’t enforceable. The goals themselves are flexible. So all of these transparency and reporting mechanisms are agreed to. So those will move forward. I don’t think it’s just a naming and shaming. I think as you build capacity in countries to look at this, they’ll see the opportunities that the U.S. is beginning to see in terms of what are the solutions out there that can not just address climate, but build jobs moving forward? This is all about shifting to a clean economy. And that is not punishment. That’s simply being smart about the future and where you can head.

BUSSEY: So the economy was already slowing—global economy was slowing for the last couple of years. That must have factored into some of the discussions. How does that factor into the discussion? If the Indian economy drifts lower, China’s—it’s already happening in China, isn’t the temptation to fire up that coal plant, get those factories humming, have jobs so that there’s not torches and pitchforks in the streets?

MCCARTHY: Well, I would suggest that seems to be the natural instinct everywhere—(laughs)—until you figure out whether or not that’s where you want your economy to head. And having those discussions is where we are right now. I mean, we’re certainly going to look at how we expend money that dedicate to this effort internationally and try to make sure that that the gut instinct to do that isn’t all you look at.

There are countries that are clearly trying to move themselves out of poverty. You would expect them to take every opportunity available to them. The challenge for us to make other opportunities available to them. It’s to really bring opportunities and options to them that allow them to choose something that’s more sustainable, and hopefully leapfrog over some of the issues that we’re dealing with now.

BUSSEY: But when you sat across the table from India, how did you answer that question? One-point-one billion people, poverty—or even China still—you know, half the population is still rural. Only half has urbanized. They got a long way to go. How did you answer that question when the said, look, at a certain point we’ve just got to face facts? We’ve got to keep people employed?

MCCARTHY: You know, the way to think about this, John, is that at this meeting the one other thing that was very different, and that I think led to the lack of naysayers in terms of climate change action, was the fact that India recognizes that it’s on the frontline of disasters and that it is going to be significantly hard-hit in a changing climate. So it’s not all as cut and dried as do we want jobs or don’t we want jobs. It’s about what do you do to protect your population at the same time. And so the clarity around climate and climate adaptation was really high. There was a lot of discussion of how do we support climate adaptation, given the change that’s already happening.

And so it really isn’t as easy for these countries to choose to continue to put limited resources into things that are going to contribute to the future disasters. It’s not that simple anymore. And so they are recognizing that they have to put people to work, but they’re also recognizing now that there are opportunities for that that don’t rely on the same old technologies.

BUSSEY: So the agreement talked about a big investment in that technical capability, as well as other type of investment. And yet, there has been previous promises of investment by the developed countries to help the developing countries along that has never really materialized. Why would it materialize now, but previously it did not?

MCCARTHY: Well, we’ve already made some additional commitments. I mean, I know that President Kerry (sic) came in and he announced that we were doubling our adaptation funds. And we also had a number of countries that have gotten together to invest in a new program that’s doubling everybody’s research dollars. So government is stepping up. What’s very different now is the private sector stepping up. There was a clear understanding that this isn’t just government’s challenge. This is an impact on business that’s already being felt. And international businesses were there in force. I met with the CEOs of many of those. They are meeting with other countries and talking about this challenge.

BUSSEY: And what were they discussing? Opportunities for them to build out windfarms, or what?

MCCARTHY: Opportunities to not make it worse by looking at mitigation strategies like that, but also talking about adaptation strategies, because water’s becoming a problem everywhere. You know, not just water quality but quantity. Flooding’s becoming difficult. Impact on agriculture is becoming something that’s much better recognized and is beginning to filter its way into business decisions and impacts. And so it really isn’t—it was great to see that the understanding of climate wasn’t just about how do we reduce greenhouse gases in a vacuum just because the future demands it, as opposed to looking at this as a concerted economic strategy, recognizing that you are going to live in a carbon-constrained world. It was a different conversation entirely. And that’s because it wasn’t all government led.

BUSSEY: So I want to get to the clean power plant in a moment, but on the topic of the U.S. being in a leadership position at this event—in part because of agreements previously reached, the tailwind that you had going in, the agreement with China for example—what else now does the U.S. need to do to maintain that leadership role and to expand its own objectives? The president’s talked about cutting carbon by 26, 28 percent by 2025, compared to 2005. What else is politically—what else should the U.S. be committing itself to, and that is politically possible in this country?

MCCARTHY: Yeah. Well, as you may know, EPA does our greenhouse gas inventory and does our reporting on how well we’ve done. And so we’re going to keep looking at bringing more expertise to that. John, there’s uncertainty around all this. And we have to keep looking at how we get these numbers right for ourselves and for other countries. So we’re going to keep looking at the science around this and the analytics, but we are also going to be implementing many of the initiatives that the president identified, those that he identified—that the U.S. has put in as the basis for our goal-setting exercise. We’re going to make sure those move forward. And we’re going to keep, over the next year, looking at other opportunities.

It’s very clear that we’re not going to get everywhere we need to go. No country’s put a plan that’s going to get them there. So we have to keep looking. For EPA, it’s looking at how we push the envelope on heavy duty vehicles. It’s getting a Montreal Protocol amendment and doing continued work on looking at hydrofluorocarbons and moving those out of the system or reducing those so that the impact is not as large as it has been. We’re going to keep looking at methane, oil and gas, and looking at whatever opportunities in that sector are available to us to begin to explore this year. So we’re going to look for opportunities that are available and keep talking about this and getting everybody’s interest and keep working with the private sector and with colleges and universities to get the science continuing, and also to get the investments we need.

BUSSEY: The role that the EPA had this go-around was quite an international one. You know, that seems to be—that seems to be kind of a new role for the administrator? Is that likely to continue? Or is—and from the standpoint of the EPA, is that likely to be now part of the brief of—for you and for future administrators. And also, what did you find to be the case at this conference, the opportunity for U.S. business internationally, talking with those same individuals you were talking with about helping them with mitigation, with adaptation, compared to, say, a competitor like the Chinese, who are investing hundreds of billions of dollars of state-subsidized money into these zones?

MCCARTHY: Yeah. Well, let me sort of hit your first issue. I think EPA’s done a lot of international work for a long time because EPA is more sophisticated than most other environmental agencies in any other country. So I think—I just have to admit it, we’ve always done this level of international discussion. It’s just people are noticing. (Laughs.) You know? And there’s been more visibility of it. But we have provided international leadership for a long time. I think we have done it where resources are available to us. You know, everybody has limitations and we work within those. One of the great things about the climate—the work that’s on climate adaptation that’s just beginning with this new agreement is that it will bring resources to the table to expand this considerably—not just by EPA, but by other countries that have similar expertise.

But we’ve been doing this for a long time, John, so there’s nothing new there. And we’re going to continue with it, because it’s an opportunity for us to recognize that environmental issues don’t actually respect boundaries, including international ones. So we’ve been working in international forums for a long time. One of the good things about it, though, is we’re integrating some of our environmental goals into discussions at G-20 and G-7. So we’re beginning to not segregate discussions on the economy from our other more segregated environmental ones, because they’re overlapping. We now don’t just have Millennium Development Goals, we have Sustainable Development Goals. So you’re able to sort of frame your larger investments in a way that will really produce the kind of healthy sort of investment—and I mean that in my terms, public healthy—and a way that’s really going to make the most sense.

Now, the second half of your question was what?

BUSSEY: About U.S. business opportunities for them.

MCCARTHY: Oh, yeah. Right.

BUSSEY: You said they were circling around—I can imagine—they were circling around this conference looking for that business. But you know, how does that stack up against a China that’s also getting into this? And we saw with solar panels, simply wipe out American business?

MCCARTHY: Yeah. I think the U.S. is trying to, once again, provide leadership on environmental technology, and on renewables. And I think we can do that. That’s been one of the goals of the president moving forward with his Climate Action Plan, is to how that we’re going to not just provide international leadership to come to an agreement, but we want the benefits—the economic benefits associated with that. And our investment community is responding to that call. And I think they’re also—part of the discussion we had at the meeting was not just about investment, but about protecting investment.

That’s where the climate adaptation work came in and that’s where a lot of the CEOs of international companies were there pushing for an international agreement on this, recognizing that without that it doesn’t really matter how well any one country does. So it was going on—you know, these discussions were happening not in a vacuum, but in a very—in a very integrated way. And I’ve never seen businesses come together so much over—certainly over an issue that has mistakenly been seen as an environmental issue for a long time. (Laughs.)

BUSSEY: So the clean power plan, we’re waiting for a federal decision on whether or not to block it until the states have an opportunity to muster their complaints against it. You’ve been very confident that this is going to go through, but what if it doesn’t? What’s plan B?

MCCARTHY: Well, first of all, plan A’s a good one. And I don’t want anyone to think it isn’t. I think we’ll get through the stay soon. We’ll be getting a decision maybe in the next couple weeks or so. And I think that the work we did on this, and if you look at it the support for many of the utilities, or certainly the lack of challenge speaks pretty—volumes to whether or not we did this right. So there’s no reason—there’s no damage that would warrant a stay that any of us can identify. So we’re really hopeful on it. And, John, I think the biggest thing that we’re looking at is to just make sure we continue the conversation with states. I mean, there’s two key points here. The stay is immediate. You know, you look at that. But that’s always, you know, the rush to judgement here.

But I think we all are confident that we meet the legal test there. But then the second question is how do we work with states to get those plans in in September? And I think that’s where I’ve been focusing. And certainly Janet McCabe and Joe Goffman, who are my dynamic duo on this, are out there working this issue very hard. But I’ve been to many meetings. And I am seeing nothing but really actually very positive energy around this. The states are beginning to work together, not just individually but together, beginning to start making choices about where they think they want to head. And I’m pretty confident we’re going to have the plans in, so.

BUSSEY: But if it doesn’t happen, plan B?

MCCARTHY: Well, this is our shot at looking at this under the Clean Air Act. We’d have to, again, and would always welcome Congress taking action. We don’t see that coming up, so we’ll look at other opportunities.

BUSSEY: Yeah, I was going to say, the politics of this could get sticky.

I’ve got a lot more, but let’s get to you. Yes, please, right here in the front. If you could identify who you are, tell us your name, who you’re with.

Q: I’m Mitzi Wertheim with the Naval Postgraduate School. Thank you so much for coming and expanding this story.

My real question is for you, John, which is how you tell the story, this holistic interdependent story, to the general, uneducated public so they recognize the time pressure and the importance? And I would suggest also, it’s incredibly important to do it visually because there are so many piece parts to this complex story. I was stunned, for example, they story, I guess it was yesterday, about all the pollution going into Rio and their concerns about what’s going to do for the summer Olympics. These are—these are great, but pictures tell more than—you know, are more than a thousand words. And I would suggest both of you start telling your story in that fashion.

BUSSEY: Good. We’ll keep that in mind. And I’m delighted to say that about five years ago The Wall Street Journal finally did begin to publish pictures. (Laughter.) So we’re almost—we’re almost up there, able to answer your good call.

MCCARTHY: Of the faces of the journalists?

BUSSEY: You know, yes, please. Right back there. Right back in the next table. Yes, please.

Q: Michael Gillette, World Bank, retired.

We spent an awful lot of time in that place to justify investment capturing the real price of vectors, including externalities such as future costs. I was disappointed with the COP21 agreement, that it seems that the meeting ducked the issue of getting the cost of carbon corrected, and failed to identify modalities to get there, like cap-and-trade or carbon tax. Would you please enlighten us about this discussion that took place there? Thank you.

MCCARTHY: Well, you know, I wasn’t involved in all of the discussions, so let me—let me say that. I mean, this agreement doesn’t address everything. No one ever claimed that it would. But there clearly is an openness. And there are many countries that are looking at whether or not they’re going to look at a cap-and-trade or a carbon tax. It doesn’t preclude that from happening. I mean, they’re the ones that are going to have to make those decisions. And I think it’s wise to let every country get their own path forward. But clearly, there’ll need to be support for that and some consistency on how one would look at that and calculate its success.

And those are things that we will be able to look at, because part of this agreement is making it clear that you set your goals, you look at how you’re going to get there, you articulate your mitigation strategies, you come back every two years to look at whether you’re achieving those, you go to workshops, conferences where we share information, where we expand everybody’s capacity to do that, and where you have an opportunity to challenge whether one another is actually going to achieve or has achieved.

So we are going to have a transparent system that will hopefully allow folks to see what countries are doing, be able to share those lessons learned, and really articulate a strategy to see whether or not things are being done correctly. So it should, if all goes well, allow the flexibility to choose different paths forward, but allow us to learn from one another about those paths forward.

BUSSEY: Yes, please. Right over here.

Q: Hi. My name’s Michael Hamburger. I’m with the State Department’s Office of Religion and Global Affairs.

And for the past year or so we’ve been involved in engaging with faith communities domestically and internationally on advocacy related to climate issues. And I wanted to get your impressions of the role of faith leaders and faith communities in the lead-up to Paris, COP21, and what their role might be in the aftermath.

BUSSEY: The pope gave it a big tailwind, didn’t it?

MCCARTHY: It did. And that Fiat was the cutest thing, seeing it roll into the back of the White House. (Laughter.) I think the role is pretty enormous. I think maybe folks in the U.S. underestimate that. We have been working at EPA and building bridges with the faith community for a few years now, particularly on climate issue, but not just exclusively, because obviously many in the faith community see this as an opportunity for us to make sure that human beings are protected the resources that God gave us. I mean, and they see that as a moral obligation. And I think the president has stood up and characterized it like that. And I think the pope has clearly been a large voice on this issue, but not exclusively.

People of all faiths are coming together on this issue, and in two different ways. Not just the fact that we have a stewardship responsibility, but they’re also recognizing really that the biggest vulnerabilities are for low-income and minority communities in the U.S. and low-income areas internationally. They are simply not prepared to take on the challenge of a changing climate. And they are generally not the ones at the table designing the strategies towards that, towards addressing it. And so it is being seen much more as a large moral obligation to address this. And their voice is going to be extraordinarily helpful.

One of the things that I’ve realized in working on climate issues for so long is how people—the minute they hear climate they pigeonhole it into some kind of a tree-hugger issue or a polar bear issue, you know? And we’ve had to make—and I think this goes to Mitzi’s point—we’ve had to make this a much more personal issue. The faith community helps us do that. It helps us do it by putting faces on it, by reminding us that we owe—that we have an obligation to protect people who cannot protect themselves. They are the ones most at risk here. But the other issue is they help up design strategies that engage people. There are things that EPA is doing now to engage the faith community. And things like our food recovery challenge, looking at food waste and how that reduces methane, but also allows you to organize things so that people who need food get it and people stop wasting food.

So there are wonderful ways in which you can build this into the very things that faith communities have focused on. Water is a clear example. It is a large symbol in faith communities. And we can start engaging people with listening to the people that they most listen to, and get the activities going so that this doesn’t become just waiting for, you know, international solutions, but bringing different ways in which individuals can participate.

BUSSEY: Yes, please.

Q: Thank you. I’m Paula Stern. I guess I’m a member of the Renewable Energy Advisory Committee over at the Commerce Department, and mother of a documentary filmmaker who focuses on climate change and putting a face on what you have been so articulate about today, as has the Obama administration. So thank you.

My question goes back to something I think that you raised with particular regard to the bilateral relationships and discussions between U.S. and China. And I’m particularly concerned every time I open my Google alert and see yet again another thing on renewable energy and climate change stuff in China, and they’re building more incinerating plants—incineration plants. Knowing that, based on my own experience here, there are entrepreneurs, I’ve worked with one, CR Energy, that has a gasification technology which eliminates these kinds of pollutants that come into the atmosphere because of incineration. And you mention methane, I think about the dumps and what is being produced out of there.

So I would love it if you would address how as a nation the United States takes those small—those entrepreneurs that have patents and technology, and get them developed into investment-worthy activities, particularly in China, because I know I worked on this for several years for CR Energy. It’s extremely, extremely frustrating and difficult, and yet China is making these constant investments in old technology, which is only going to add to the problem?

BUSSEY: So you saw this happening at the conference, this solution?

MCCARTHY: You know, this is something that there have been more solutions put on the table. You’re not wrong to be frustrated. It takes a long time for these technologies to work their way into a market. But the one thing that’s different now is that they see a market. (Laughs.) One of the reasons why this president and why EPA went out for as long as we did in our clean power plan is because we needed to send a longer-term market signal than three years, or five years, or seven years. That’s the only way that investment is going to have the window that it needs to invest and understand that it’s going to have a return on that investment.

Now, there are two things that happened during the COP this year. One was mission innovation, which was Secretary Moniz’s really great initiative to get eight of the larger countries to get together to double their research investment and coordinate on that. That’s a big deal. But it also was Bill Gates and his group whose name, as it were—worse acronym than EPA; I thought private sector would be better at acronyms. What is—what is—did you all hear the Bill Gates initiative?

AUDIENCE MEMBERS: Breakthrough Energy Coalition.

MCCARTHY: Breakthrough Energy Coalition. Thank you. Maybe it’s a good one, but I can’t ever remember it. I mean, basically this was an effort to bring billions of private sector dollars to the table for the sole purpose of investing in early start-ups. This was the commitment to say: We have agreed to take the added risk because the reward is—the need is so great that we will risk some losers more than we usually would. And I think we need to have that.

So there is an acknowledgment that technology is clear. What’s frustrated me and climate efforts I think for decades, is that—is that there has been a sense that if we don’t have every technology solution identified to be able to get to less than 2 degrees, or now less than 1 ½, then it ain’t good enough. Well, what’s not been good enough is nothing. (Laughter.) So this is really, I think, changes the dynamic in terms of setting a long-term investment.

In terms of China, I want to push back a little bit. You are right that they continue investments. Their energy—their investments now are shifting rather dramatically in terms of how they’re investing. And I can get you some follow-up information on that because I don’t have it readily available, but their commitments on how they are going to bring renewables up to a certain level and start reducing their reliance on coal is already showing. They are already changing their investment portfolio dramatically. And some of the additional commitments that they made while in Paris are consistent with that. So nothing turns on a dime. But nothing turns at all unless you’re telling them that there’s a direction that the rest of the world is going to head. And that’s what we got.

BUSSEY: China even wrote it into their five-year plan, strategic industries, one of them being renewable pollution-reducing industries, which should be of concern to American companies because that means, again, trillions of dollars of subsidies from the central government.

Yes, please, right here.

Q: Hi. My name is Talia Schmidt. I’m a university student at the College of William and Mary.

And I had two questions for you, if that’s OK, today. The first question is more about the agency itself. One of the critiques from critics and environmentalists of the EPA is that they feel sometimes that’s there’s a revolving door between industry leaders and EPA leaders. So I was wondering if you could comment on that and whether you think that’s true.

And then the second is more just about current events and what’s happening in the U.S. right now. We’ve seen in California, of course, there’s the big story on the methane leak. And I’m wondering if you can kind of comment on how you feel that, moving forward, the U.S. and the U.S. government can improve how we are regulating these different plants and different places so that these different industries are keeping their equipment up to date, because I know that this was one of the plants where some say that there was a part of the leakage facility that was outdated. And if they had been up to speed with correcting that, then we might have missed some of these problems.

BUSSEY: Methane, a lot worse than CO2.

MCCARTHY: Yeah. Yeah, I know. (Laughter.) I know—all too painfully know. Let me hit the first issue first, obviously, is the revolving door for industry. And I don’t want to be flippant in the way I say this, but honestly I’m opening every door and window of this agency. (Laughs.) I think everybody deserves to be able to get in and have their voices heard. And if we can’t hear them inside, people are going outside. I do not see industry as coming in there in a way that is crowding the field or taking away our ability to see what the science or the law actually says. We do what the science and the law says.

But what I am looking for industry to do is the same as anybody else. Every state, every tribe, every stakeholder can come in and tell me what is the best, most reasonable, sustainable way to achieve what the science tells me I need to do and what the law is demanding. And if they have the best ideas, I am running with their ideas. I might even give them credit for it. (Laughter.) And I think in the clean power plan we did that. You know, it benefited by those discussions.

So as much as people might worry, these are not behind-closed-door discussions. Everybody knows who I am meeting with. And they are not coming in there and thinking they’re meeting with somebody who’s going to just take a quick note and go do what they say. They know they’re coming in there to have a substantive discussion about why they’re right. And other people are doing the same thing. And I welcome it every time. And I hope the agency continues to have that open-door policy.

Now, the second thing is on the methane leaks and keeping up with technology. I actually think that’s a—that is a really, really good point. I tend to think that we have some outdated regulations. And EPA tends to keep up more because our laws require that, but there is a challenge for us to get and look at technologies and making sure that they’re being kept up with and that our regulations keep up with the different ways in which industry is changing and the energy world is changing. I think we do the best we can. In the case of Porter Ranch, I can’t speak to it because I’m not privy to the investigation, but there is one that is certainly going on.

We have minimal oversight of those types of facilities. In fact, we don’t have any. And so we are working with the state on the public health issues around that, making sure that people are being relocated. Everybody knows about Porter Ranch? If you don’t, you should read about it. It’s a significant methane leak from a well that’s used as a storage that’s ancillary to a pipeline. And so it’s a storage facility, essentially. And it is—it is leaking significant amounts of methane. And they’re trying to figure out how to depressurize it so that they can stop the leak. But it’s been going on since October and it’s not a good situation.

But you’re not wrong to say we need to keep up with it. And we need to make sure that there’s compliance with the current standards.

BUSSEY: Questions from the press way in the back. Anybody? Nobody? OK. Yes, way in the back there.

Q: Hi. Jean Chemnick from ClimateWire.

The moment around the president signing the Paris accord, is that going to sort of be the next way for the U.S. to weigh in and show leadership? And is that going to be a big event in New York, with that signing? And can you tell me a little bit about the strategy around it, the communications and everything?

MCCARTHY: I don’t have anything I can share. I’ve not been engaged in the discussion. Sorry.

BUSSEY: Right over here, way in the back.

Q: Hi. Dave Shepardson with Reuters.

Can you talk a bit about the status of the Volkswagen diesel emissions issue? You’re going to be meeting next week with VW CEO. Are you satisfied with the recall fixes they propose to date? Can you give us any sense of when you think VW might be beginning the process of recalling and fixing the vehicles?

MCCARTHY: Well, Dave, you probably know we’ve been having a large amount of technical discussions back and forth with Volkswagen. At this point, we haven’t identified a satisfactory way forward, but those discussions are going to continue. And we are really anxious to find a way for that company to get into compliance. And we’re not there yet.

BUSSEY: Council member questions? Yes, please, right here.

Q: Thank you, John. And thank you, Gina, for coming back here. This, I know, is at least your second time, because I had the privilege of moderating your last time here.

MCCARTHY: I remember.

Q: So I think it’s an indication that we’ve entered a new era of environmental diplomacy that’s recognized at places like the Council on Foreign Relations.

So my question—

Q: (Off mic.)

Q: (Laughs.) Well, thank you, Mitzi. Sherri Goodman. Sherri Goodman, Consortium for Ocean Leadership.

My question goes to what might characterize this COP21 as heralding a new era of investment powered diplomacy, which seems to me has been building for some time but really has took its full flourish here in Paris. Not only are we talking about unleashing the power of clean energy and renewables, but also markets for clean air technology, clean water technology, autonomous system tracking of everything from air, land, water, food that we need to do environmental monitoring and provide environmental intelligence in the future. But a range of other new markets that potentially are opening up. And how do you see—do you see that being a model for future diplomacy, not only climate diplomacy but other, as you’ve talked about, international, environmental—and not just environmental diplomacy, but sort of a new era where you have business as powerful as governments at the table, and sort of pointing the direction?

MCCARTHY: Well, I’ve been called probably one the least diplomatic people in the world, so I don’t want to speak like a diplomat. I would be really lousy at it. You know, I can’t—I can’t speak to it more broadly, but my sense was that it was a powerful way to do business, for government and business to work together to figure out how a path forward can be made. And I expect it will have an impact. One of the things I think that—for me, I think it expanded our ability to be able to work with business in a productive way.

EPA has been looking very hard at new technologies, particularly monitoring technologies, because I think from my perspective the world of environmental protection has been—really looked like it’s just a government issue in the hands of a few when I really think it needs to be a shared responsibility much more broadly. So we have been looking at ways of increasing citizen science, looking at, you know, new technologies and how you reconcile those, and our decision making, and advance those and provide markets for those, because the world’s changing.

I don’t think we can expect to be monitoring everything the way we have done it before. And we need it to be more broadly recognized as something that’s of a concern to all of us and bring everybody together. New technologies are amazing in terms of their ability to take hold and change the way we do business. We just need to integrate those more into our business.

BUSSEY: Yes, way back there.

Q: Hi. I’m Penny Starr with CNS News.

According to the Energy Information Administration, although alternative and renewables are growing slightly, the fossil fuels will still account for 80 percent of U.S. energy needs through 2040. And federal data also shows that U.S. carbon emissions are at almost a 20-year low right now. Now does that—those facts fit into the picture that EPA is painting of U.S. energy—the U.S. energy landscape? Thank you.

MCCARTHY: Well, I think that just as Climate Change is a long-term issue, clearly addressing that is. But I don’t think anyone disputes the direction in which the world is heading. How quickly it gets there, including in the U.S., is going to be up for debate. But what I always have to constant remind people—and this is, again, maybe an infatuation with new technology for me—is that no one would have predicted what the world looked like today 20 years ago—no one, zero. You know, if you told me 30 years ago there wouldn’t be—you know, there wouldn’t be a phone in my house sitting on a wall, I would have thought you were nuts, right? And now nobody is investing in landlines. (Laughs.) Would you, you know?

And so there’s—the world changes dramatically. And I think the energy world it’s not going to be different because people are looking for continued opportunity for investment. And frankly, a lot of the investment that had been made before is so old and has not been invested in, that now there is an opportunity for significant investment. And that is going to be, I think, in a direction which we are saying the energy world is heading. And so I think you’re going to see an escalation of that transition moving forward.

BUSSEY: We have time for one more quick question. Yes, please, right back here.

Q: Thank you. Adam Taylor with the World Bank.

Thank you for your leadership leading in Paris and beyond.

MCCARTHY: You too.

Q: We’ve talked a lot about finding greater efficiencies and renewable energies, but another piece of the technology question, which I think the Paris agreement kind of relies upon quite a bit, is the potential to take carbon out of the atmosphere. And this is a cutting-edge area, contentious in some circles. But I’m kind of curious what you see the prospects are for that, because if you read the Paris agreement closely, for countries to ratchet up as quickly as many of us hope there has to be some progress in that area. But again, you know, it’s not really clear where that’s going to come from.

MCCARTHY: You know, I haven’t been directly involved in those discussions, but certainly I’m aware that they’re happening. John Holdren, this has been an area where he has spent a considerable amount of time. I can’t speak to the discussions that went behind it, because I wasn’t engaged in it. But when you’re dealing with an issue like climate, you’re not going to dismiss any avenue to address it. It is a big enough problem that it’s got to be addressed. But for me, I’m going to with what I have available, and with incremental improvements in that, and ways in which we can continue to invest. And I do think there’s going to be large controversy in any of those strategies, but I certainly wouldn’t dismiss them until I heard them. But that’s not where I’ve been focusing my time.

BUSSEY: Well, I think no matter where you might be on the climate change issue, the Paris negotiations really did provide an incredible sense of momentum to the discussion overall. So I want to ask you to join me in thanking the Council on Foreign Relations and Gina McCarthy for this very interesting discussion.

MCCARTHY: Thanks, John. Appreciate it. (Applause.)

(END)

This is an uncorrected transcript.