Peterson Institute Press Room

News Release: The Economic, Employment, Energy Security and Environmental Impact of the proposed American Power Act

May 20, 2010
Contact:
Katharine Keenan: (202) 454-1334

Washington—On May 12, Senators John Kerry (D-MA) and Joseph Lieberman (I-CT) released details of the proposed American Power Act, a comprehensive energy and climate change bill under development since last fall. With US unemployment just below 10 percent and a ruptured well pouring oil into the Gulf of Mexico, the Senators promised that the legislation would protect the environment and reduce US dependence on foreign oil while creating jobs and increasing US economic competitiveness at little cost to consumers.

A new study by the Peterson Institute for International Economics provides the first comprehensive assessment of the draft legislation's ability to achieve these goals. Assessing the American Power Act, authored by visiting fellow Trevor Houser along with Shashank Mohan and Ian Hoffman, employs the Department of Energy's National Energy Modeling System to forecast the legislation's economic, employment, energy security, and environmental impact through 2030. Key findings of the study (summarized in attached table [pdf] include:

Energy Sector Changes: The American Power Act would significantly alter the way the United States produces and consumes energy. The share of total energy demand met by fossil fuels would fall from 84 percent today to 70 percent in 2030. Renewable and nuclear energy would grow from 8 percent each of US energy supply today to 16 and 14 percent respectively in 2030.

Energy Security Implications: The Act would reduce US oil imports by 33 to 40 percent below current levels and 9 to 19 percent below business-as-usual by 2030. This would cut US spending on imported oil by $51 to $93 billion per year and, by lowering global oil prices, reduce oil producer revenues by $263 to $436 billion annually by 2030.

Environmental Impact: The Act would establish an economy-wide carbon price starting at $16.47 per ton in 2013 and growing to $55.44 dollars per ton in 2030, reducing greenhouse gas emissions from covered sources 22 percent below 2005 levels by 2020 and 42 percent by 2030.

Employment Effects: The Act prompts $41.1 billion in annual electricity sector investment between 2011 and 2030, $22.5 billion more than under business-as-usual. This stimulates US economic growth and job creation in the first decade, increasing average annual employment by about 200,000 jobs.

Impact on Consumers: By pricing carbon, the American Power Act raises the price of fossil fuels for businesses and consumers. Households see an average 3 percent increase in electricity rates and 5 percent increase in gasoline prices between 2011 and 2030. Energy efficiency improvements largely offset these energy price increases—households see somewhere between a $136 increase and a $35 decrease in average annual energy expenditures, depending on future improvements in vehicle efficiency.

Download news release and summary table [pdf]

About the Authors

Trevor Houser, visiting fellow at the Peterson Institute for International Economics, is partner at the Rhodium Group (RHG) and director of its Energy and Climate Practice. He is also an adjunct lecturer at the City College of New York and a visiting fellow at the school's Colin Powell Center for Policy Studies. During 2009 he served as senior advisor to the US Special Envoy on Climate Change. His publications include Copenhagen, the Accord, and the Way Forward (2010), The Economics of Energy Efficiency in Buildings (2009), A Green Recovery? Assessing US Economic Stimulus and the Prospects for International Coordination (2009), Leveling the Carbon Playing Field: International Competition and US Climate Policy Design (2008), and China Energy: A Guide for the Perplexed (2007).

Shashank Mohan is a research analyst with RHG in New York. In addition to leading RHG's energy modeling work, he covers macroeconomic issues as part of the firm's India Practice. Prior to joining RHG, Mr. Mohan worked as a consultant for Columbia University's Earth Institute, on a World Bank project to design an electricity expansion model for Kenya and Senegal, and as a software engineer at Microsoft.

Ian Hoffman is a research analyst with the RHG's Energy and Climate practice. Prior to joining RHG, Mr. Hoffman's graduate work at the University of California, Berkeley focused on modeling optimal combinations of conventional and renewable generation on the Western Interconnection, as well as analysis of global markets for wind and nuclear power. Mr. Hoffman also has 20 years of experience as a newspaper journalist with an emphasis on science, energy, and security. He is based in Oakland, CA.

Media Advisory: Proposals for Ukraine: Time for Reforms

WHO:	C. Fred Bergsten Director, PIIE Anders Åslund Senior Fellow, PIIE Ceyla Pazarbasioglu Outgoing Chief of Mission to Ukraine, IMF
WHEN:	Thursday, February 18, 2010 12:00 – 2:00 PM (presentation at 12:30)
WHERE:	C. Fred Bergsten Conference Center Peter G. Peterson Institute for International Economics 1750 Massachusetts Avenue, NW Washington, DC 20036 (Metro: Red Line to Dupont Circle, south exit.)
RSVP:	Katharine Keenan, Media Relations Manager 202.454.1334 Note: This meeting is open to all press but by invitation only to the general public.

PIIE will host the US release of Proposals for Ukraine: Time for Reforms, a recently issued report by the International Independent Experts Commission on reforming Ukraine’s economy after its presidential election. Senior Fellow Anders Åslund has co-chaired the Commission along with Ukrainian Professor Olexander Paskhaver since its inception in September 2009. Dr. Åslund will present the main conclusions of the report. Ceyla Pazarbasioglu, Ukraine Mission Chief at the IMF, will lead the discussion immediately following Dr. Åslund’s initial remarks. Key findings of the report are:

Carry out gas reform
Make the National Bank of Ukraine independent
Move toward inflation targeting
Cut public expenditures
Undertake comprehensive deregulation of enterprise
Conclude a European Association Agreement
Renew privatization efforts
Legalize private sales of agricultural land
Adopt a law on public information
Complete the modern commercial legislation

The International Commission of Independent Experts was established to draft an action program for Ukraine after the presidential elections. The committee is comprised of prominent international and Ukrainian academics, policymakers, and lawyers. The work of the Commission has been financed by the Swedish and Netherlands Ministries for Foreign Affairs, with additional support from the United Nations Development Program. The International Centre for Policy Studies has functioned as its secretariat.

If you are not able to attend, audio and video of the event will be available at: www.piie.com/events/events.cfm

News Release: Nicholas Lardy Appointed to New Chair in Honor of Anthony M. Solomon

The Peterson Institute for International Economics is pleased to announce the creation of an endowed chair in honor of the late Anthony M. Solomon and the appointment of Nicholas Lardy as the first scholar to hold the position. Dr. Lardy, who has been a senior fellow at the Institute since 2003, is widely regarded as one of the world's leading experts on the economy of China. In its recent comprehensive survey of experts on that country, the National Journal called Dr. Lardy "everybody's guru on China." His recent pathbreaking work on rebalancing China's economic growth and on its exchange rate policy has been extremely influential in the policy debates on those critical topics in both China and the United States. Dr. Lardy was the sixth most widely quoted think tank economist in the media during 1997–2005, the latest period for which such data are available, and is cited regularly in the pages of the world's financial press.

Read full news release.

View news release as a pdf.

Media Advisory: Better Together: The Costs and Benefits of an Integrated North American Cap-and-Trade Policy

WHO:
C. Fred Bergsten
Director, PIIE

Duncan Munn
Senior Vice President and Chief Operating Officer, C.D. Howe Institute

Gary Doer
Canadian Ambassador to the United States

WHAT:
Conference on US-Canada Cooperation on Climate Change

WHEN:
Wednesday, February 3
8:30 AM – 2:00 PM
(Keynote presentation at 12:30)

WHERE:
Bergsten Conference Center, PIIE
1750 Massachusetts Avenue, NW
Washington, DC 20036
(Metro: Red Line to Dupont Circle, south exit.)

RSVP:
Katharine Keenan, kkeenan@piie.com

PIIE and the C.D. Howe Institute of Canada will co-host a half-day conference on February 3 to examine US and Canadian climate change policies and next steps following the Copenhagen summit. The conference will examine what each country is doing to reduce greenhouse gas emissions and assess the potential costs and benefits of closer coordination, including through an integrated North American carbon trading regime. Canadian Ambassador to the United States Gary Doer will deliver the luncheon keynote address on current climate change efforts in Canada and provide a Canadian perspective on evolving US policies. See below for a full agenda.

8:30 am – 8:35 am	Welcome and Overview Duncan Munn, Senior Vice President and Chief Operating Officer, C.D. Howe Institute. C. Fred Bergsten, Director, Peterson Institute for International Economics.

8:35 am – 9:40 am	Session I: The Political Economy of Canadian and US Cap-and-Trade Policies

8:35 am – 9:00 am	Prospects for congressional legislation on cap-and-trade, federal regulations of carbon emissions, and climate policies at the state level. �What is the fallout from the outcome of the Copenhagen conference and the Massachusetts election? Panel Session: Moderator:� Gary Clyde Hufbauer, Senior Fellow, Peterson Institute for International Economics Speaker: �James Bradbury, Senior Associate, World Resources Institute Speaker:� Gary N. Horlick, Law Offices of Gary N. Horlick, Washington, DC

9:00 am – 9:40 am	Discussion

9:40 am – 10:35 am	Session II: Trade Rules and Legislation

9:40 am – 9:55 am	Implications of a continental cap-and-trade system for NAFTA and the WTO. Speaker: Jeffrey J. Schott, Senior Fellow, Peterson Institute for International Economics

9:50 am – 10:35 am	Discussion

10:35 am – 10:50 am	Refreshment Break

10:50 am – 11:55 am	Session III:� The Costs and Benefits of Creating a Unified Cap-and-Trade System

10:50 am – 11:10 am	Issues in emission-trading design and linkage: �permit-allocation methods, industry coverage or revenue reallocation across countries. �The cost of emissions permits, the impact on the economy, leakage, GHG reductions, and trade between Canada and the US. Speaker: Carolyn Fischer, Senior Fellow, Resources for the Future. Speaker: Dave Sawyer, EnviroEconomics.

11:10 am – 11:55 am	Discussion

12:00 pm – 2:00 pm	Luncheon: Keynote Speaker The Honourable Gary Doer, Canadian Ambassador to the United States.

Media Advisory: Special Event: Montek Singh Ahluwalia on PM Singh's Visit to Washington and India's Global Role

WHO:	C. Fred Bergsten Director, PIIE Montek Singh Ahluwalia Deputy Chairman, Planning Commission, Government of India; economic advisor to Prime Minister Singh
WHAT:	Remarks on PM Singh’s visit to Washington and analysis of India’s growing role in world economy
WHEN:	Wednesday, November 25, 2009 12:30 – 2:00 PM *Note unusual start/end time. Lunch at 12:30, program at 1:00.*
WHERE:	C. Fred Bergsten Conference Center Peter G. Peterson Institute for International Economics 1750 Massachusetts Avenue, NW Washington, DC 20036 (Metro: Red Line to Dupont Circle, south exit.)
RSVP:	Katharine Keenan, Media Relations Manager 202.454.1334 Note: This meeting is open to all press but by invitation only to the general public.

Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission of the Government of India and one of Prime Minister Manmohan Singh’s closest economic advisors, has just been confirmed as a luncheon speaker at a special event on Wednesday, November 25. In addition to his Planning Commission and advisory roles, Mr. Ahluwalia is also India’s sherpa for the G-20 summits that have now become the primary forum for global economic leadership. He will provide a read-out on the Prime Minister’s current visit to Washington and an analysis of India’s growing role in the world economy.

About Montek Ahluwalia

Mr. Ahluwalia has been in his current position since July 2004. He became the first Director of the Independent Evaluation Office at the International Monetary Fund in 2001 and held that position for three years. His prior service to the Government of India included membership in the Planning Commission and Economic Advisory Council to the Prime Minister, Finance Secretary and Secretary of the Department of Economic Affairs in the Ministry of Finance, and Commerce Secretary. He spent ten years at the World Bank earlier in his career and has published numerous articles on development and global economic issues. Mr. Ahluwalia has been a member of the Group of 30, a private, nonprofit, international body composed of very senior representatives of the private and public sectors and academia since 1997.

Media Advisory: Indian Ambassador to US Meera Shankar to Speak on India's Role in the World Economy and the Future of US-India Relations

WHO:	C. Fred Bergsten Director, PIIE Meera Shankar Indian Ambassador to the United States
WHAT:	Remarks on India's Global Economic Role & Future of US-India Relations
WHEN:	Friday, November 18, Noon–2:00 PM (Lunch at noon, program at 12:30)
WHERE:	C. Fred Bergsten Conference Center Peter G. Peterson Institute for International Economics 1750 Massachusetts Avenue, NW Washington, DC 20036 (Metro: Red Line to Dupont Circle, south exit.)
RSVP:	Katharine Keenan, Media Relations Manager 202.454.1334 Note: This meeting is open to all press but by invitation only to the general public.

President Obama has invited Indian Prime Minister Manmohan Singh to be his administration's first state visitor on November 24. It is expected that the two heads of state will focus on further strengthening the US-India relationship and continued cooperation on issues such as the economic downturn, climate change and counterterrorism The week before the visit, Indian Ambassador to the US, Meera Shankar, will present remarks at PIIE on India's role in the global economy and the future of US-India relations. Ambassador Shankar's remarks should offer an important preview of what is to come.

About Ambassador Shankar

Ambassador Shankar has held several high-level assignments during her career as an officer of the Indian Foreign Service. She served as Director in the Prime Minister's Office from 1985-1991, after which she was posted to Washington as Minister (Commerce) from 1991-1995. Thereafter she headed the Indian Council of Cultural Relations in New Delhi, overseeing India's cultural diplomacy. Her most recent assignment was as Ambassador to Germany from December 2005 to April 2009.

If you are not able to attend, audio and video of the event will be available at: www.piie.com/events/events.cfm

Media Advisory: Remarks on "The New World Order: The Influence of Asia and Emerging Countries"

WHO:	C. Fred Bergsten Director, PIIE Gerard Lyons Chief Economist and Group Head of Global Research, Standard Chartered Bank
WHAT:	Remarks on "The New World Order: The Influence of Asia and Emerging Countries"
WHEN:	Friday, October 30, Noon–2:00 PM (Lunch at noon, program at 12:30)
WHERE:	C. Fred Bergsten Conference Center Peter G. Peterson Institute for International Economics 1750 Massachusetts Avenue, NW Washington, DC 20036 (Metro: Red Line to Dupont Circle, south exit.)
RSVP:	Katharine Keenan, Media Relations Manager 202.454.1334 Note: This meeting is open to all press but by invitation only to the general public.

The Peterson Institute will host a luncheon meeting on Friday, October 30 to discuss "The New World Order: The Influence of Asia and Emerging Countries," featuring remarks by Gerard Lyons, Chief Economist and Group Head of Global Research at Standard Chartered Bank. Following his initial presentation, Dr. Lyons will take questions from the audience.

About Gerard Lyons

Dr. Lyons is a leading expert on the world economy, international financial system, macroeconomic policy and global markets. He has 20 years' experience in senior roles with some of the world's leading financial institutions. Previous positions include Chief Economist at DKB International and consultant to the Dai-Ichi Kangyo Bank and Chief UK Economist at Swiss Bank Corporation. Dr. Lyons has testified frequently to UK Parliamentary Committees, made presentations to annual meetings of Commonwealth Finance Ministers and published widely on financial and economic issues.

If you are not able to attend, audio and video of the event will be available at: www.piie.com/events/events.cfm

Media Advisory: Russian Minister of Finance Alexei Kudrin on Russian Economic Policy in the Midst of the Global Financial Crisis

WHO:	C. Fred Bergsten Director, PIIE C. Randall Henning Visiting Fellow, PIIE Jong-Wha Lee Chief Economist & Head of Office of Regional Economic Cooperation, ADB Christopher MacCormacc Resident Director General, ADB North American Representative Office Michael Mussa Senior Fellow, PIIE
WHEN:	Wednesday, October 14, Noon–2:00 PM (Lunch at noon, program at 12:30)
WHERE:	C. Fred Bergsten Conference Center Peter G. Peterson Institute for International Economics 1750 Massachusetts Avenue, NW Washington, DC 20036 (Metro: Red Line to Dupont Circle, south exit.)
RSVP:	Katharine Keenan, Media Relations Manager 202.454.1334 Note: This meeting is open to all press but by invitation only to the general public.

Asian Development Bank (ADB) chief economist Dr. Jong-Wha Lee will address a PIIE luncheon meeting on Wednesday, October 14. He will speak on "Asia's Recovery and Global Imbalances," a topic of particular importance since Asia leads the global recovery and will play a central role in the rebalancing strategy agreed at the G-20 summit in Pittsburgh. Dr. Lee will participate in a panel discussion with PIIE Director C. Fred Bergsten and Senior Fellows Michael Mussa and Randy Henning following his remarks.

The session coincides with the US launch of the update to ADB's flagship publication, the Asian Development Outlook, released in March. The update projects economic expansion of developing Asia to come in at 3.9%, revised up by 0.5 percentage points from the ADO 2009 forecast of 3.4%. The growth projection for 2010 is likewise upgraded to 6.4% from 6.0%.

If you are not able to attend, audio and video of the event will be available at:
www.piie.com/events/events.cfm

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About Jong-Wha Lee

Jong-Wha Lee is Chief Economist, Economics and Research Department (ERD); and Head, Office of Regional Economic Integration (OREI); of the Asian Development Bank. As Chief Economist, Dr. Lee is the chief spokesperson for ADB on economic forecasts and trends. ERD undertakes economics and policy research and capacity building, supports ADB operations, networks with the international research community, and produces the annual Asian Development Outlook, ADB's flagship publication forecasting economic trends in the region. As Head of OREI, Dr. Lee oversees the development of strategies and approaches to promote regional cooperation and integration as a platform for poverty reduction and promotion of economic development in Asia and the Pacific.

Dr. Lee has over 20 years of professional experience as an economist and academic including at such institutions as the International Monetary Fund (IMF) Harvard University, Inter-American Development Bank, United Nations Development Programme and World Bank. He also served as a member of the National Economic Advisory Council in the Republic of Korea.

Prior to joining ADB, Dr. Lee was Director of the International Center for Korean Studies and Professor of Economics at Korea University. He has published numerous books and reviewed journal articles, especially on the topics of human capital, growth, financial crises, and economic integration.

Dr. Lee, a national of the Republic of Korea, obtained his Ph.D. and Master's degree in Economics from Harvard University, and his Master's and Bachelor degrees in Economics from Korea University in Seoul.

If you are not able to attend, audio and video of the event will be available at: http://www.piie.com/events/events.cfm

News Release: Energy Efficiency in Buildings: Necessary for Low Cost Climate Change Solutions

Washington—In 2008, G-8 leaders set a goal of reducing global greenhouse gas (GHG) emissions by 50 percent below current levels by 2050. Reaching this goal demands a wholesale transformation in the world's production, consumption, and use of energy resources. Buildings account for almost 40 percent of total GHG emissions—more than transportation or any other sector. Improving energy efficiency in buildings is considered one of the cheapest ways to reduce emissions and an opportunity for producing high impact at relatively low, and often negative, cost.

...

Read full news release

News Release: Former IMF Chief Economist Mussa Predicts 4 Percent Economic Growth for US and World Next Year with US Unemployment Dropping Below 9 Percent

Washington—While most economic forecasters expect a tepid recovery this year and next, a leading economist at the Peterson Institute for International Economics (PIIE) is predicting that GDP growth in the United States and the world will be considerably higher than generally anticipated. Michael Mussa, senior fellow at PIIE and former chief economist at the International Monetary Fund (IMF), predicts that real GDP growth in the world will be 4.2 percent in 2010 over 2009, and real GDP growth in the United States will be 4.0 percent from the middle of 2009 through the end of next year. This is only about two-thirds the pace of typical US recoveries from sharp recessions but it is nearly double the consensus predictions of other top forecasters.

The Mussa projections [pdf] also imply a cumulative rise of US real GDP from the second quarter of 2009 to the final quarter of 2010 of almost 7 percent, or about $875 billion in 2005 real dollars. This is considerably higher than the August 2009 Blue Chip Survey, which projected a cumulative rise of barely more than 3 percent. Blue Chip forecasts suggest unemployment in the United States rising above 10 percent. Dr. Mussa projects it to peak at or a little below 10 percent this year and below 9 percent by the end of next year.

Dr. Mussa's findings could have wide-ranging implications for leaders of the world's top economies as they gather in Pittsburgh for the G-20 summit later this month. They will meet to assess the global economic picture and plan future actions, including whether to carry out an early "exit strategy" from the interventions during the crisis of the last year or whether additional stimulus measures might be needed. A more robust than anticipated growth rate in the United States could also have an important impact on the American political scene as the nation heads into an election next year.

The findings were released on September 17 by Dr. Mussa at a luncheon meeting at PIIE.

At the same event, Nicholas Lardy, senior fellow and author of several books and numerous papers on China's economy, unveiled his own conclusion that China's growth in 2009 will be in the 8- to 9-percent range and that next year it will probably be in the 9- to 10-percent range. Moreover, Dr. Lardy argues that China's recovery is sustainable, contrary to the contention of some specialists that recovery is short term because of its dependence on temporary government spending for investment. For example, he argues, household consumption growth is the strongest of any emerging market. The conclusions of Dr. Mussa and Dr. Lardy indicate that the two most important economic powers are poised to help the world climb out of the worst global economic downturn in modern history. (See table 1.)

"The great global recession of 2008 and early 2009 is over and world recovery is now under way," Dr. Mussa reported at the PIIE event. Whereas most forecasters expect a weak recovery, and some fear a "double dip" in which economies fall back into recession at an early stage, Dr. Mussa holds the view that "a V-shaped recovery is still the most likely course"—that is, a steep recovery following a deep recession.

Dr. Mussa notes that the latest figures show that the world recession bottomed out around the middle of this year. His forecast for global real GDP growth (on a year-over-year basis) is minus 1.1 percent this year and 4.2 percent for 2010, spurred in part by greater than anticipated growth in developing countries and emerging markets. His forecast for 2009 is modestly above corresponding forecasts by the IMF but considerably higher than the IMF forecasts for 2010. The IMF is somewhat more pessimistic than the average of most published forecasts.

The latest forecasts are especially striking for the United States. The latest figures on US GDP indicate a decline of real growth in 2009 of minus 2.4 percent, compared to 2008. But real GDP growth during the second half of 2009 is now expected to sharply reverse the decline of the first half of the year. Also remarkable is that the real GDP during 2010 is expected to grow 5 percent on a fourth-quarter-to-fourth-quarter basis, underpinning the projection of a rise of 4 percent year-to-year. Dr. Mussa's cautionary note is that typical recessions in the United States have been followed by growth in the first six quarters afterward of about 10 percent. Thus his projection suggests a growth substantially short of the recoveries following recessions of the 1950s through the 1980s.

Dr. Mussa's and Dr. Lardy's presentations at PIIE were scheduled to be followed by a question-and-answer session presided over by C. Fred Bergsten, director of PIIE.

Table 1 Real GDP Growth Forecasts for 2009 and 2010 Mussa Baseline and IMF (July 2009 Year-over-year percentage changes)

Country/Region	2008	Mussa 2009	Mussa 2010	IMF 2009	IMF 2010

World	2.7	–1.1	4.2	–1.4	2.5
Advanced economies	0.5	–3.3	3.3	–3.8	0.6
United States	0.4	–2.4	4.0	–2.6	0.8
Japan	–0.7	–5.2	2.5	–6.0	1.7
United Kingdom	0.7	–4.0	2.5	–4.2	0.2
Canada	2.0	–2.0	3.4	–2.3	1.6
Euro Area	0.6	–3.7	2.3	–4.8	–0.3
Germany	1.0	–4.8	2.2	–6.2	–0.6
France	0.3	–3.0	2.2	–3.0	0.4
Italy	–1.0	–4.5	1.8	–5.1	–0.1
Other Euro Area	1.4	–3.0	2.5	—	—
Other Advanced	1.6	–3.5	4.5	–3.9	1.0
Developing Countries	7.6	1.9	5.4	1.5	4.7
Asia	7.9	6.0	7.8	5.5	7.0
China	9.0	8.3	9.0	7.5	8.5
India	7.1	6.4	7.5	5.4	6.5
Other Developing Asia	6.3	0.5	5.5	—	—
Latin America	4.1	–2.3	3.4	–2.6	2.3
Brazil	5.1	Nil	3.6	–1.3	2.5
Mexico	1.4	–5.8	3.0	–7.3	3.0
Central & Eastern Europe	3.0	–3.5	2.6	–5.0	1.0
Commonwealth of Independent States	5.5	–4.8	2.6	–5.8	2.0
Middle East	4.2	2.0	4.0	2.0	3.7
Africa	5.2	2.0	4.0	1.8	4.1

About the Peterson Institute

The Peter G. Peterson Institute for International Economics is a private, nonprofit, nonpartisan research institution devoted to the study of international economic policy. Since 1981 the Institute has provided timely and objective analysis of, and concrete solutions to, a wide range of international economic problems. It is one of the very few economics think tanks that are widely regarded as "nonpartisan" by the press and "neutral" by the US Congress, it is cited by the quality media more than any other such institution, and it was recently selected as Top Think Tank in the World in the first comprehensive survey of over 5,000 such institutions. Support is provided by a wide range of charitable foundations, private corporations, and individual donors, and from earnings on the Institute's publications and capital fund. It celebrated its 25th anniversary in 2006 and adopted its new name at that time, having previously been the Institute for International Economics.

News Release | Peterson Institute and World Resources Institute Widen Scope of Climate Change Research: Doris Duke Charitable Foundation Awards $400,000 Grant

Washington—The Doris Duke Charitable Foundation (DDCF), via its Climate Change Initiative, has awarded the Peterson Institute for International Economics (PIIE) a grant of $400,000. The one-year grant will fund PIIE's research, in collaboration with the World Resources Institute (WRI), on international financing of low-carbon growth under a post-2012 climate agreement.

Under the leadership of PIIE Director C. Fred Bergsten and WRI President Jonathan Lash, this partnership will harness the two organizations' expertise in international finance, climate change, and financing mechanisms designed to meet mitigation and adaptation needs in developing countries. The new research program will complement ongoing PIIE-WRI work on the intersection of trade and climate change policies funded by a 2008 DDCF grant.

"With the International Energy Agency estimating the cost of a 50 percent reduction in global emissions by 2050 at $45 trillion beyond business as usual, it is not surprising that the challenge of finding financing for an international agreement quickly rises to the top of the agenda," said Dr. Bergsten. "Working with WRI, we aim to provide international negotiators with a better understanding of the challenge and options with which to overcome it."

The project will:

assess the level and nature of global investment necessary to address climate change;
evaluate potential sources of mitigation and adaptation financing;
prescribe changes in bilateral and multilateral policies and institutions to facilitate the investment;
address the challenge of coordinating existing mechanisms and institutions in the likely event that negotiators in Copenhagen will not agree on a single new institution to oversee mitigation and adaptation financing;
monitor and influence efforts at mainstreaming and innovating climate policies through multilateral development bank policies and funds; and
analyze and support national climate change plans and programs that major developing countries are putting in place, which would determine how these funds cohere in energy, land use, and transport policies at the national and local levels.

"We are grateful for the Doris Duke Charitable Foundation's support for this important work," said Jonathan Lash, president of WRI. "The challenge of climate change should mark the end of business as usual for investors in conventional fossil fuel technologies. Only those institutions—existing, new, or reformed—that can demonstrate they are ready to support—a transformation to a low-carbon economy—while continuing to serve the energy needs of growing economies should be entrusted with the new resources generated by climate change policy."

Initial results from this research are expected in fall 2009, including two policy briefs on "US Funding and the United Nations Framework Convention on Climate Change" and "Climate Change and the Bretton Woods Architecture." Further research will be published in book form in spring 2010. The book will demonstrate how to manage capital flows institutionally to enable low-carbon growth. It will also address the role and constraints of international financial institutions in making low-carbon investments possible in emerging markets and offer practical insights into how to coordinate those efforts along with private-sector funds.

As climate change legislation moves through the US Senate and world leaders prepare to negotiate a post-2012 agreement at the December UNFCCC climate change conference in Copenhagen, it is essential that US and world leaders understand the issues at stake. A profound shift in the global economic order resulting from the current crisis will undermine efforts to address climate change and produce dire consequences without a sustainable approach. Climate control efforts must be viable economically in order to be worthwhile and successful. To date, most research on international financing has concentrated on specific mechanisms or institutions rather than where climate-related funding fits into the changing financial landscape and broader coordination issues. PIIE and WRI's joint research seeks to fill this knowledge gap and help shape the policy debate.

About the Institutes

PIIE (www.piie.com) is a private, nonprofit, and nonpartisan research institution devoted to the study of international economic policy. Since 1981, the Institute has provided timely and objective analysis of, and concrete solutions to, a wide range of international economic problems.

WRI (www.wri.org) is an independent, nonpartisan, and nonprofit organization with a staff of more than 100 scientists, economists, policy experts, business analysts, statistical analysts, mapmakers, and communicators developing and promoting policies that will help protect the Earth and improve people's lives.

About the Doris Duke Charitable Foundation

The mission of the Doris Duke Charitable Foundation is to improve the quality of people's lives through grants supporting the performing arts, environmental conservation, medical research, the prevention of child maltreatment, and through preservation of the cultural and environmental legacy of Doris Duke's properties.

The goal of the DDCF Climate Change Initiative is to help build a clean-energy economy. In pursuit of this goal, the initiative supports analytical work that informs the government policies that are needed to foster technological innovation in the energy sector and accelerate the emergence of new clean-energy technologies. This includes work related to the mechanisms and institutions that support clean-energy technology development around the globe, including financing mechanisms.